Increase in Social Security tax to take chunk out of paychecks - WREX.com – Rockford’s News Leader

Increase in Social Security tax to take chunk out of paychecks

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UNDATED (WREX) -

Even though Congress passed the fiscal cliff deal, a small chunk of your paycheck will still be missing.

As we mentioned on 13 News on January 1, an increase in Social Security tax will make an appearance on payroll checks this year. That's because last year's temporary 4.2 percent tax jumped to 6.2 percent in 2013.

Two years ago, the state of Illinois increased taxes by two percent, but there was no change in what was withheld from paychecks, meaning Illinois residents were still getting the benefit of the two percent without having to pay for it.

"Social Security needs the money," Morrissey Accountants CPA Nicole Lawson says. "Everybody knows there's a huge deficit with the government and they just couldn't let the two percent go on anymore."

According to Lawson, individuals will see the increase, rather than businesses, because the payroll tax holiday was on individuals only.

The increase means a person making $40,000 a year will pay an additional $800 a year, about $67 a month.

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