Spending Bill Passes: What’s Next for the Payroll Tax Bill?

Today the Senate approved the Spending Bill, which keeps government funded until the end of September 2012, but what about the extension of the payroll tax cut bill?  Well, it wasn’t a complete victory for both bills, but the Senate did approve a deal to extend the payroll tax cut bill and federal unemployment insurance for another two months until the end of February 2012.

spending bill/payroll tax bill
spending bill/payroll tax bill

The two month extension enables taxpayers to continue to pay the lower 4.2% of earnings instead of 6.2% for an additional two months.  There was some disappointment among Senate leaders since they were unable to agree on a longer-term deal this time, however the two month extension continues to give some relief to families at a time when many are still struggling.

The House is now expected to vote on the two month payroll tax extension deal next week and Congress will be required to revisit the issue in 2012.  At least we can try to relax and enjoy the holidays, knowing that our government will not face shut down and many of us can continue to receive the payroll tax break through February 2012.

TurboTaxLisa

Lisa Lewis is a CPA and the TurboTax Blog Editor. Lisa has 15 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. Lisa also has been a TurboTax product user for many years and understands how the software program works. In addition to extensive tax experience, Lisa also has a very well-rounded professional background. She has held positions as a public auditor, controller, and operations manager. Prior to becoming the TurboTax Blog Editor, she was a Technical Writer for the TurboTax Consumer Group and worked on a project to write new FAQs to help customers better understand tax laws. She could also be seen helping TurboTax customers with tax questions during Lifeline. For Lisa, getting timely and accurate information out to customers to help them is paramount.

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