Last night Congress approved the new tax proposal and the IRS has sent out notices concerning the new Social Security Withholding.  The new withholding rate will change to 4.2%.  It’s is recommended that you change your payroll calculations as soon as possible, but you are required to change by January 31 at the latest.  Any offsetting adjustments for over withholding must by made by March 31.

What you’re going to want to look for is Notice 1036.  As of this writing, it hadn’t been posted on the IRS website yet, but I expect it to be up shortly.  If you run payroll from a computer program, make sure you check for and download any updates before any January payroll is issued.  I believe that this will be the link to the new withholding tables once they become available:  http://www.irs.gov/pub/irs-pdf/n1036.pdf

According to the IRS post, even though the Social Security withholding rate has gone down, this does not change the future Social Security benefit to the employee.