Income Tax Update
2013 TAX CHANGES
The 2013 federal tax rates will remain relatively stable and most employees will not see an increase in their Federal Income Tax withholding for 2013. However, the net pay for most employees will generally be reduced due to the expiration of the reduced 4.2% Social Security Tax that was in place for 2011 and 2012. The rate increases back to 6.2% for 2013.
The employee Medicare tax rate has been 1.45%; however, beginning in 2013, an additional 0.9% will be added to the tax on income in excess of $200,000.
NEW REPORTING REQUIRED ON 2012 W-2 FORMS
As part of the Affordable Care Act, the University is required to report the value of employer-provided health care coverage on the 2012 W-2 Form that will be distributed in January, 2013. The amount reported must include both the portion paid by Oakland University and the portion paid by the employee. The value of the coverage provided will not be considered taxable income; however, reporting is required for information purposes only. Per IRS documentation, the purpose of the reporting requirement is to provide employees useful and comparable consumer information on the cost of their health care coverage. The amount will be reported in Box 12, using code DD on your Federal W-2 form for 2012. For additional information regarding the Affordable Care Act, visit the IRS website.
STATE OF MICHIGAN INCOME TAX REDUCTION EFFECTIVE OCTOBER 1, 2012
Effective October 1, 2012, the State of Michigan personal income tax rate decreases to 4.25 percent from 4.35 percent and the standard deduction increases to $3,950 from $3,700.
NOTICE TO NONRESIDENT ALIEN EMPLOYEES
If you are a nonresident alien, please contact the Payroll Office; you may be subject to special taxation of income.
This notice is provided as a source of information and does not constitute tax or other professional advice. If tax advice or other professional assistance is required, the services of a professional advisor should be sought.
General questions regarding these tax changes can be directed to the Payroll Office, at email@example.com
, or x3034.
To determine how possible 2013 tax changes may affect your financial situation, please contact your personal tax advisor. All other question contact our office at 248-370-3472 or firstname.lastname@example.org.