Photo courtesy of Nick TranSan Diego Chapter
American Payroll Association 

2013 Federal & CA Updates

Social Security and Medicare Tax for 2013

 

The social security wage base for 2013 is $113,700. The social security tax rate remains at 6.2% for employers and reverts to 6.2% for employees and 1.45% for Medicare tax for employees and employers. There is no wage base limit for Medicare tax.

Beginning with wages paid in 2013, an additional 0.9% Medicare tax rate will apply to single employees who earn more than $200,000 and to married couples who file joint tax returns and earn more than $250,000. For high earners, therefore, the total Medicare tax rate will be 2.35%.

 

Social Security Recipients allowable wage without forfeiting SS benefits

 

Tax Rate

2012

2013

Employee

 7.65%

 7.65%

Self-Employed

15.30%

15.30%

NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.2% on earnings up to the applicable taxable maximum amount. The Medicare portion (HI) is 1.45% on all earnings.

 

Maximum Earnings Taxable:

2012

2013

Social Security (OASDI only)

$110,100

$113,700

Medicare (HI only)

No Limit

Federal Unemployment Tax (FUTA)

 

The FUTA tax rate is 6.0% of taxable wages as of

July 1, 2011. The taxable wage base is the first $7,000 paid in wages to each employee during a calendar year. Employers who pay the state unemployment tax, on a timely basis, will receive an offset credit of up to 5.4% regardless of the rate of tax they pay the state. Therefore, the net federal tax rate is generally 0.6% (6.0% - 5.4%). This would equate to a maximum of $42.00 per employee, per year (.006 X $7,000. = $42.00) in federal tax. State tax rates are based on requirements of state law.

 

Federal Minimum Wage:  

Federal Minimum Wage:   $7.25

 

Standard Mileage Rates

 

Effective January 1, 2013, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

          56.5 cents per mile for business miles driven

          24 cents per mile driven for medical or moving purposes; and

          14 cents per mile driven in service of charitable organizations 

 

Per Diem Rates Change

 

 

The new per diem rates are available on their website at:

http://www.gsa.gov/portal/category/21287

 

 

Pension Plans (for year 2013)

 

•·        The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased from $17,000 to $17,500.

•·        The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $5,500.

•·        The limit on annual contributions to an Individual Retirement Arrangement (IRA) rises to $5,500, up from $5,000 in prior years.

•·        The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $59,000 and $69,000, up from $58,000 and $68,000 in 2012. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $95,000 to $115,000, up from $92,000 to $112,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $178,000 and $188,000, up from $173,000 and $183,000.

•·        The AGI phase-out range for taxpayers making contributions to a Roth IRA is $178,000 to $188,000 for married couples filing jointly, up from $173,000 to $183,000 in 2012. For singles and heads of household, the income phase-out range is $112,000 to $127,000, up from $110,000 to $125,000. For a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000.

•·        The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $59,000 for married couples filing jointly, up from $57,500 in 2012; $44,250 for heads of household, up from $43,125; and $29,500 for married individuals filing separately and for singles, up from $28,750.

•·        Effective Jan. 1, 2013, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $200,000 to $205,000. For a participant who separated from service before Jan. 1, 2013, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2012, by 1.0170.

•·        The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2013 from $50,000 to $51,000.

•·        The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) is increased from $17,000 to $17,500.

•·        The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C) and 408(k)(6)(D)(ii) is increased from $250,000 to $255,000.

California Employment Tax Rates for 2013

 

The UI rate schedule in effect for 2013 is Schedule "F+." This is Schedule F plus a 15 percent emergency surcharge, rounded to the nearest tenth. Schedule "F+" provides for UI contribution rates from 1.5% to 6.2%. The taxable wage limit is $7,000 per employee. For more information about how your UI rate is determined, see Information Sheet: California System of Experience Rating (DE 231Z). 

 

State Disability Insurance (SDI)

The State Disability Insurance (SDI) withholding rate for 2013 is 1.0%.  The SDI taxable wage limit is $100,880.00 for each employee per 2013 calendar year.  The maximum to withhold for each employee is $1,008.80

2013 SDI/PFL Benefit Amounts

 

DE 2588 - Rev. 4 (1-08) - State Disability Insurance (SDI) and Paid Family Leave (PFL) Weekly Benefit Amounts

DE 2589 - Rev. 1 (1-08) - State Disability Insurance (SDI) and Paid Family Leave (PFL) Weekly Benefit Amounts in Dollar Increments

 

California Minimum Wage

 

California Minimum Wage: $8.00

 

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