Central Payroll Bureau 
News release effective January 12, 2012
W2’s
2011 W2 information is scheduled to be available via POSC access by close of business on January 12, 2012. We anticipate mailing your original printed copy from Central Payroll no later than January 27, 2012. If you need your numbers early, please use POSC to print your working copy.
New Codes on Your 2011 W-2 Wage and Tax Statement for Health Plan Cost Reporting and the Roth Retirement Plans
When looking at your 2011 W-2 Wage and Tax Statement many employees will see a large amount reported in Box 12, Code DD. This amount represents the collective cost of your group health plan. The cost of coverage that is reported on the W-2 is based on what you paid toward the Pharmacy plan, Basic Health Insurance, and the subsidized amount the State of Maryland pays toward your plan coverage. This cost is included on the W-2 (in Box 12, under Code DD), and is for your information only. The amount is NOT included in taxable income.
The Patient Protection and Affordable Care Act of 2010 require that employers report the total collective cost of group health plan coverage to their employees annually on their W-2s.
Employees that are enrolled in the 401K and 457(b) Roth after tax contributions for supplemental retirement benefits will see new codes on their W-2 statement in Box 12. The new codes are Code AA for the after-tax contributions to a Roth 401(k) retirement plan and Code EE for the after-tax contributions to a Roth 457(b) retirement plan. The amounts of either deduction are included in your taxable wages in box 1 of your W-2 for tax reporting purposes.
There are several types of compensation and benefits that are reported in Box 12. Box 12 will report a single letter or double letter code followed by a dollar amount. You can find a description of each code posted in Box 12 of the W-2 Wage and Tax Statement on the back of your W-2.
Overview Of Payroll Changes For 2012
As most of you know, Congress passed the ‘Temporary Payroll Tax Cut Continuation Act of 2011’. This means employers will continue to deduct only 4.20% social security tax (instead of the normal 6.2%) from an employee’s pay. This continuation of a reduced social security tax on employees is only good through February 29th, 2012. Of special interest - high income employees (those earning in excess of $18,350 during the first 2 months of the year) should consult their tax advisor concerning the recapture provision that could impose an additional 2% tax on earnings when filing your 2012 tax returns.
Employers are waiting for additional direction from Congress on the FICA percent to be used for employees starting in March, 2012. We will make the announcement to all, as soon as we know. Let’s keep our fingers crossed that Congress will extend the cut through the end of 2012.
The FICA Tax wage base has increased from the 2011 amount of $106,800 to a new 2012 amount of $110,100.
Two local Maryland counties have changed their tax rates: Anne Arundel County’s rate will decrease to 2.49% and Queen Anne County’s rate will increase to 3.2%.
For more information on other Federal and State Tax information, look for the ‘Payroll Changes Effective January 1, 2012’ memo, soon to be posted on our Web Page under the ‘State Employees, News & Information’ link.
Thank You
Robert Murphy, Director
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