Photo courtesy of Nick TranSan Diego Chapter
American Payroll Association 

New Changes in Federal & CA for 2011

Social Security and Medicare Tax for 2011

The social security wage base for 2011 is $106,800. The tax rate remains 6.2% for social security and 1.45% for Medicare tax. There is no wage base limit for Medicare tax.

Social Security Recipients allowable wage without forfeiting SS benefits

Tax Rate

2010

2011

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 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.

Maximum Earnings Taxable:

2010

2011

Social Security (OASDI only)

$106,800

$106,800

Medicare (HI only)

No Limit

Quarter of Coverage:

2010

2011

$1,120

$1,120

Retirement Earnings Test Exempt Amounts:

2010

2011

Under full retirement age
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.

$14,160/yr.

($1,180/mo.)

$14,160/yr.

($1,180/mo.)

The year an individual reaches full retirement age
NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.

$37,680/yr.

($3,140/mo.)

$37,680/yr.

($3,140/mo.)

There is no limit on earnings beginning the month an individual attains full retirement age.

Social Security Disability Thresholds:

2010

2011

Substantial Gainful Activity (SGA)

Non-Blind

$ 1000/mo.

$ 1000/mo.

Blind

$1,640/mo.

$1,640/mo.

Trial Work Period (TWP)

$ 720/mo.

$ 720/mo.

SSI Federal Payment Standard:

2010

2011

Individual

$ 674/mo.

$ 674/mo.

Couple

$ 1011/mo.

$1,011/mo.

SSI Student Exclusion Limits:

2010

2011

Monthly Limit

$1640

$1,640

Annual Limit

$6,600

$6,600

Federal Unemployment Tax (FUTA)

The FUTA tax rate is 6.2% of taxable wages. 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 0.8% (6.2% - 5.4%). This would equate to a maximum of $56.00 per employee, per year (.008 X $7,000. = $56.00) in federal tax. State tax rates are based on requirements of state law.

Federal Minimum Wage: $7.25 per hour effective July 24, 2009

Standard Mileage Rate

Beginning January 1, 2011, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

  • xx cents per mile for business miles driven;
  • xx cents per mile driven for medical or moving purposes; and
  • xx 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/gsa/ep/contentView.do?contentType=GSA_BASIC&contentId=17943

Pension Plans (for year 2009)

Increase in IRS Maximum Pension Contribution Amount for 2011


The 402(g) limit did not change - $16,500.

The 401(a) limit did not change - $245,000.00 for wage base.

Voluntary Catch-Up Contributions for Eligible Participants

Effective January 1, 2011 the IRS annual limit for the additional, voluntary Catch-Up contributions to the Supplemental Plan will remain at $5,500 for eligible participants. Under IRS rules an employee is eligible to make a Catch-Up contribution, only if

  • Employee will be age 50 or older by December 31, 2010, and
  • Employee contributes the regular maximum employee contribution of $16,500 in 2010

California Employment Tax Changes for 2011

Important Payroll Tax Changes in 2011

Change to Quarterly Reporting

Starting with the first quarter of 2011, employers will begin filing new:

Quarterly Contribution Return and Report of Wages (DE 9)

Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C).

For more information about 2011 payroll tax changes, please review the 2011 Payroll Tax Reporting Changes FAQs.

NOTE: The draft versions of the new forms are for informational purposes only. Final versions will be available to all employers in December 2010. Print specifications are available on EDD’s Payroll Taxes undefined Forms and Publications page. Registered employers will receive the new forms automatically by mail starting in 2011.

2011 UI, ETT, and SDI Rates

The UI rate schedule in effect for 2011 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 percent to 6.2 percent. Exception: Employers subject to Section 977(c) of the CUIC must pay at the highest rate provided by law plus an additional 2 percent, see SUTA Dumping (AB 664). 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).

The Voluntary UI program is not in effect for 2011.

The Employment Training Tax (ETT) rate for 2011 is 0.1 percent. The UI and ETT taxable wage limit remains at $7,000 per employee per calendar year.

The State Disability Insurance (SDI) withholding rate for 2011 is 1.2 percent. The taxable wage limit is $93,316 for each employee per calendar year. The maximum to withhold for each employee is $1,119.79.

Your UI, ETT, and SDI tax rates are combined on a single rate notice, Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088). The DE 2088 will be mailed to you in December, with a mailing date of December 31. Employers will have 60 days from the December 31 mailing date to protest any item on the DE 2088 except SDI and ETT, which are specifically set by law.

New employers: Your UI tax rate is 3.4 percent for up to three years. If you purchased an established business, you have the option of acquiring the previous owner's UI tax rate (see Purchasing a Business With Employees).

2010 UI, ETT, and SDI Rates

The UI rate schedule in effect for 2010 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 percent to 6.2 percent. Exception: Employers subject to Section 977(c) of the CUIC must pay at the highest rate provided by law plus an additional 2 percent, see SUTA Dumping (AB 664). 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).

The Voluntary UI program is not in effect for 2010.

The Employment Training Tax (ETT) rate for 2010 is 0.1 percent. The UI and ETT taxable wage limit remains at $7,000 per employee per calendar year.

The State Disability Insurance (SDI) withholding rate for 2010 is 1.1 percent. The taxable wage limit is $93,316 for each employee per calendar year. The maximum to withhold for each employee is $1,026.48.

Your UI, ETT, and SDI tax rates are combined on a single rate notice, Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088). The DE 2088 will be mailed to you in December, with a mailing date of December 31. Employers will have 60 days from the December 31 mailing date to protest any item on the DE 2088 except SDI and ETT, which are specifically set by law.

New employers: Your UI tax rate is 3.4 percent for up to three years. If you purchased an established business, you have the option of acquiring the previous owner's UI tax rate (see Purchasing a Business With Employees).

2011 PIT Withholding Schedules

The rates are 6.6% for supplemental wages and 10.23% for stock options and bonus payments. For additional information about supplemental wages, refer to the California Employer’s Guide (DE 44), or the Information Sheet: Personal Income Tax Withholding undefined Supplemental Wage Payments, Moving Expense Reimbursement undefined WARN Act Payments (DE 231PS).

Contact the Taxpayer Assistance Center at (888) 745-3886 for additional assistance.

NOTE: Tables are for specified time periods.

California provides two methods for determining the amount to be withheld from wages and salaries for state personal income tax.

EFFECTIVE DATES: 2011

Method A - Wage Bracket Table Method (PDF) - with Instructions
Low Income Exemption, Estimated Deduction, Weekly Payroll Period, Biweekly Payroll Period, Semi-Monthly Payroll Period, Monthly Payroll Period, and Daily / Miscellaneous Payroll Period

Method B - Exact Calculation Method (PDF) - with Instructions
Low Income Exemption, Estimated Deduction, Standard Deduction, Personal Exemption Credit, Annual Payroll Period, Daily / Miscellaneous Payroll Period, Quarterly Payroll Period, Semi-Annual Payroll Period, Semi-Monthly Payroll Period, Monthly Payroll Period, Weekly Payroll Period, and Biweekly Payroll Period

2011 Meals and Lodging Values

2011 Meal Values for Non-Maritime Employees*

Meal

Value

Breakfast

$2.25

Lunch

$3.15

Dinner

$4.90

Total

$10.30

A meal not identified as either breakfast, lunch, or dinner

$3.60

Lodging Value

Value is set at 66-2/3 percent of the ordinary rental value to the public, but not in excess of $1,193.00 per month or less than $38.70 per week.

2011 Meal and Quarters Values for Licensed Maritime Employees

Licensed Personnel

Value

Meals

$10.30

Quarters

$8.10

Total per day

$18.40

2011 Meal and Quarters Values for Unlicensed Maritime Employees

Unlicensed Personnel

Value

Meals

$10.30

Quarters

$5.50

Total per day

$15.80

Fishermen

Lodging value is $38.70 per week or $5.50 per day for periods of less than a week.

(*Maritime employees’ values of meals and lodging are different than all other employees and are shown in the above table. Lodging values for maritime employees apply only when the facilities meet specific minimum standards.)

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