Take-home pay shrinks as payroll tax cut expires
People who work in Arizona may notice their take-home pay has shrunk a little. That’s because a temporary cut in payroll taxes expired.
In 2010, Congress passed a temporary two percent break in the Social Security rate to help stimulate the economy. One year later Congress decided to extend the payroll tax break through 2012. Arizona accountant Aaron Blau says this time during the debate if the fiscal cliff, Congress decided to revert back to the original 6.2 percent Social Security tax rate.
"We knew it was coming. We were expecting it. Unfortunately, some people are certainly feeling a little bit of the bite because two percent of income is still a substantial amount," Blau said.
Blau says low-income workers are more likely to feel the change in policy.