On the evening of Feb. 22 at the White House, President Barack Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012, H.R. 3630. On Feb. 23, the IRS released a revised Form 941, Employer’s Quarterly Federal Tax Return, to reflect the extended payroll tax cut.
The act extends the 4.2% rate for the employee portion of Social Security tax through the end of 2012. It also extends certain unemployment benefits and blocks a cut in Medicare payments to doctors. The act also repeals earlier-enacted shifts in the timing of corporate estimated tax payments.
The act raises revenue through an auction of the spectrum of public airwaves, currently reserved for television, to allow for more wireless internet systems.
A 2% recapture tax enacted in the December legislation that extended the payroll tax cut through Feb. 29, which effectively capped the amount of wages eligible for the payroll tax cut at $18,350, was also repealed by the act.