How the 2013 Tax Changes Might Affect You

Starting this month, new changes in the federal tax code will be implemented. To help faculty and staff better understand how these changes might affect your paycheck, University Human Resources has compiled a brief list for the campus to explain changes you may see on your 2013 payroll earnings statements.

Social Security & FICA Rate Changes

The Social Security (OASDI) rate for employees is returning to 6.2 percent from the 4.2 percent rate that was in effect as part of the Middle Class Tax Relief and Job Creation Act of 2012. This tax increase will be reflected in your January 2013 earnings statement.

The FICA tax rate, which is the combined social security tax (OASDI) rate of 6.2% and the Medicare tax rate of 1.45 percent, will be 7.65 percent for 2013 up to the social security wage base.

The Social Security Administration (SSA) announced that the 2013 social security wage base will be $113,700. As in prior years, there is no limit to the wages subject to the Medicare tax; therefore all covered wages are still subject to the 1.45 percent taxes.

Something new in 2013 is that wages paid in excess of $200,000 will be subject to an extra 0.9 percent Medicare tax meaning that once an employee reaches this threshold, the employee will be required to pay an additional 0.9 percent in Medicare taxes. The IRS has created a website with answers to frequently asked questions about the additional 0.9 percent Medicare tax.

Updated 2013 Income Tax Withholding Tables

Federal tax tables have changed for 2013. On Jan. 3, the IRS released these updated federal income tax withholding tables for 2013, which reflect legislation signed Jan. 2 by President Obama. The changes can be found in a downloadable PDF for Notice 1036. University of Arkansas employees will see these changes in January 2013 and employees may check Future Pay in webBASIS to view these changes.

2012 W2 Availability

W2s will be mailed to the employee’s home address before Jan. 31. If necessary, please update your address with payroll as soon as possible. You may do this by accessing webBASIS or filling out a form. To update your address using webBASIS, visit http://admin.uark.edu and log in with your University of Arkansas login (same as your email) and password. Click on “My personal data” and then “Addresses, etc.” From there you can change your address to ensure your W-2 gets mailed to the correct address.

Employees may view different scenarios and make changes to their Income Tax Withholding (W4) by using the Future Pay function in webBASIS. To do so, visit http://admin.uark.edu and log in with your University of Arkansas login (same as your email) and password. Click on “My Pay” and then “Future Pay.” By clicking on the link for the pay date, such as 1/31/2013, and then clicking on the dollar amount, you can view your gross income minus deductions. Here, you can make changes to your federal and/or state taxes or use the “What If” Scenario to see how your income may change if you change your deductions. If you choose to make changes to your W4 after viewing the what if scenario, go back to “My Pay” and click on “Income Tax Withholding (W4).” Check the box “I have read the W4 Instructions.” Make changes, click on “Validate” then check the box “Under penalties of perjury, I declare that” and then click “Save.” 

Questions may be directed to Human Resources at 575-5351 or https://askhr.uark.edu/.