Employers should be allowed to continue using the 2012 income tax withholding tables and rates until federal tax rate negotiations are completed, the American Payroll Association said Dec. 17.
The association, in a letter to Treasury Secretary Timothy Geithner and acting Internal Revenue Service Commissioner Steven Miller, said the 2012 rates should remain in effect until the 2013 income tax rates are determined and withholding tables are released.
Employers should also be allowed to continue withholding the employee portion of the Social Security tax at 4.2 percent until a rate for 2013 is determined, APA said. The temporary payroll tax cut will expire Dec. 31.
The Treasury Department has not released new withholding tables, but the letter noted that the treasury secretary has flexibility to prescribe withholding tables and the ability to inform employers of any anticipated tax increase.