The Middle Class Tax Relief and Job Creation Act of 2012 that was recently passed, extends the 2% Social Security tax cut through the entire 2012 calendar year. The social security tax rate for employees will continue at the reduced 4.2% rate with employer contributions remaining at the standard 6.2%. This reduced rate was temporarily in effect for the 2011 year only but was extended for two months this year by the Temporary Payroll Tax Cut Continuation Act of 2011.
The IRS reports that “no action is required by workers to continue receiving the payroll tax cut” and “As before, the lower rate will have no effect on workers’ future Social Security benefits.”
The IRS Notice IR-2012-27 has additional information.