Bulletin: 2013 Tax Withholding Changes and Employer-Sponsored Health Coverage W-2 Reporting (Revised January 3, 2013)
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2013 Tax Withholding Changes
Paychecks issued for the 12/31/12 pay period (payday 1/7/13) are the first for tax year 2013. Social Security and VDI taxes are withheld again for those employees who reached the maximum withholding in 2012. 2013 benefit deductions, including BeWell incentives, also begin with this paycheck.
New federal and state withholding tax rates are in place for 2013. Updated state withholding tax rates have been applied beginning with the 1/7/13 paycheck. Updated federal withholding tax rates, as established by the Taxpayer Relief Act of 2012, will be in place beginning with the 1/22/13 paycheck.
Several compulsory payroll tax rates have changed for 2013. The California Short-Term Disability rate remains at 1.0%. The Social Security tax rate decrease implemented as the result of the Tax Relief Act of 2010 has expired. This means that the employee Social Security tax rate has increased from 4.2% to 6.2% effective January 1, 2013. New for tax year 2013, an additional Medicare tax of .9% will be applied to employee wages in excess of $200,000.
The tax rates in effect for 2013 are summarized in the table below. You may update your federal and/or state income tax withholding allowances at any time by clicking the "Edit W4 and DE4 Information" link on the "Employee Information" tab in Axess. Click here for step-by-step instructions.
| Tax Deduction Code | Description | Tax Rate |
|---|---|---|
| Fed Withholding | Federal Income Tax | W-4 Rate |
| Fed MED/EE | Medicare | 1.45% |
| Addl Med | Additional Medicare Tax | 0.9% on wages earned in excess of $200,000 |
| Fed OASDI/EE | Social Security | 6.2% on first $113,700 wages earned |
| CA Vol Dis/EE | Short-Term Disability | 1.0% on first $100,880 wages earned |
| CA Withholding | State Income Tax | DE-4 Rate |
Please note: If you claimed exemption from federal and/or state income tax withholding for tax year 2012 and wish to continue for tax year 2013, you are required to file an updated W-4/DE-4 in Axess by February 15, 2013.
Employer Sponsored Health Coverage W-2 Reporting
Under the Affordable Care Act, employers are required to report on Form W-2 the cost of coverage under an employer-sponsored group health plan. This item will be part of your 2012 W-2 Form, reported in Box 12DD. This amount is included for informational purposes only; it is not taxable. For a full overview of Stanford W-2 Forms, please click here.