CUNY employees will see a 12-month reduction in their portion of the Social Security Tax (FICA) from 6.2 to 4.2 percent. The savings, a welcome sight in these financial times, are a result of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, passed by Congress and signed by President Obama in December. Even better news is that it is a reduction that will not affect future Social Security benefits. “As a result of the payroll tax reduction provided by this legislation, you will see your take-home pay go up during 2011, beginning with your first paycheck in January,” says Gloriana Waters, Vice Chancellor for Human Resources Management.
Waters offered some suggestions on how employees can make the extra money work for them: “Start contributing to one of the tax-deferred annuity plans available to CUNY employees, such as the New York State Deferred Compensation (457b) Plan,” she says. “If you’re already participating, consider increasing your contribution. It’s a terrific way to save for retirement and lower your income tax bill at the same time.”
The legislation also continues the tax-free reimbursement of $230 per month, which CUNY employees receive as a mass transit benefit. The limit on wages subject to Social Security tax remains at $106,800 for 2011. Medicare taxes remain unchanged at 1.45% for each employee.
For more information on the tax relief bill, visit the Internal Revenue Service Website and for information on the New York State Deferred Compensation plan, Click Here.