For 2013, Social Security tax rates for employees have returned to 6.2%, up from 4.2%. The tax applies to the first $113,700 of wages.
The tax rates reduced in 2001 and 2003 for individuals earning up to $400,000 and families earning up to $450,000 will go unchanged per the Act. However, for Income above those levels, the tax rates will increase from 35% to 39.6%.
The marriage penalty relief, which is the expanded 15% for those filing jointly, has been extended permanently.
Effective 2013 there is also a planned increase of 0.9% for employees known as the “Additional Medicare Tax.” This is part of the Patient Protection and Affordable Care Act and is not part of ATRA. However this additional tax will impact individuals earning over $200,000 and married joint filers earning over $250,000. So regardless of filing status, the current Medicare tax rate of 1.45% will increase to 2.35% on earnings exceeding $200,000. The employer portion of 1.45% for Medicare will remain. Employers are now mandated to withhold the “Additional Medicare Tax” on all workers whose wages are over $200,000 regardless whether they are single or married.