I ran our first biweekly payroll of 2012 yesterday and when I gave a paycheck to my assistant she noted that it was for a couple of dollars more that the last check she received in 2011, even though her gross pay was the same and nothing about her status had changed.
I've used the program PayWindow for over ten years and the 2012 tax tables for that program have been loaded into it.
Looking at her paycheck stub I saw that the federal income tax witholding deduction was slightly smaller than on the stub for her last check, as was the state (Massachusetts) income tax witholding deduction.
I looked at the tax tables in IRS Publication 15 for 2011 and 2012 and sure enough, there was a difference in the amount to be deducted.
Whats happened?
I haven't checked the Massachusetts tax tables yet, perhaps someone answering this post can also give me a clue as to why her Massachusetts' witholding went down a bit too.
Did this perhaps come about because one year has a length of 365 days, 5 hours, 48 minutes and 47 seconds, so a leap year is used every four years to keep things closer to correct and 2012 is one, with 366 days? (Just kidding.)
Thanks guys,
Jeff