Payroll Taxes: Rates and ChangesFind out the latest on payroll tax rates and changes and how they may affect your business so you can maintain compliance.
2019 Limitation AdjustmentsUpdated 11/15/18
- The limited compensation amount under a defined benefit plan is $225,000.
- The compensation limit for defined-contribution plans is $56,000.
- The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans and the federal government’s Thrift Savings Plan is $19,000.
- The annual compensation limit for qualified plans is $280,000. The salary threshold used in the definition of a “key employee” in a top-heavy plan is $180,000.
- The salary threshold used in the general definition of a highly compensated employee is $125,000.
- The dollar limitation for employees 50 and older who participate in an employer plan other than a 401(k) or 408(p) SIMPLE is $6,000. The dollar limitation for employees 50 and older who participate in 401(k) or 408(p) SIMPLE is $3,000.
- The annual compensation limit for eligible participants in certain governmental plans is $415,000. The compensation amount regarding simple employee pensions (SEPSs) is $600.
- The limitation for SIMPLE retirement accounts is $13,000.
- The limitation concerning the qualified gratuitous transfer of qualified employer securities to an employee stock ownership plan is $50,000.
- The definition of a control employee for fringe-benefit valuation purposes is $110,000.
- The dollar limitation on premiums paid for a qualifying longevity annuity contract is $130,000.
- The adjusted gross income limitation for determining the retirement savings contributions credit for married taxpayers filing a joint return is $38,500.
- The adjusted gross income limitation for determining the retirement savings contributions credit for taxpayers filing as head of household is $28,875.
- The adjusted gross income limitation for determining the retirement savings contributions credit for all other taxpayers is $19,250.
- The limit on annual contributions to an individual retirement arrangement is $6,000.
- The applicable dollar amount for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) is $103,000. The applicable dollar amount for all other taxpayers who are active participants (other than married taxpayers filing separate returns) is $64,000. If an individual or the individual’s spouse is an active participant, the applicable dollar amount for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0. The applicable dollar amount for a taxpayer who is not an active participant but whose spouse is an active participant is $193,000.
- The deduction for taxpayers making contributions to a traditional IRA is phased out for single individuals and heads of household who are active participants in a qualified plan (or another specified retirement plan) and have adjusted gross incomes between $64,000 and $74,000. For married couples filing jointly, if the spouse who makes the IRA contribution is an active participant, the income phase-out range is between $103,000 and $123,000. For an IRA contributor who is not an active participant and is married to someone who is an active participant, the deduction is phased out if the couple’s income is between $193,000 and $203,000. For a married individual filing a separate return who is an active participant, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
- The adjusted gross income limitation for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is $193,000. The adjusted gross income limitation for all other taxpayers (other than married taxpayers filing separate returns) is $122,000. The applicable dollar amount for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0.
- The adjusted gross income phase-out range for taxpayers making contributions to a Roth IRA is $193,000 to $203,000 for married couples filing jointly. For singles and heads of household, the income phase-out range is $122,000 to $137,000. For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
2019 Tax ProvisionsUpdated 11/16/2018
- Adoption Credit: The adoption tax credit is $14,080.
- Cafeteria Plans: The dollar limitation on voluntary employee salary reductions for contributions to health flexible spending arrangements is $2,700.
- Qualified Transportation Fringe Benefit: The monthly limitation for the qualified transportation fringe benefit and for qualified parking is $265.
- Standard Deductions: The standard deduction for heads of household is $18,350, $12,200 for singles and married couples filing separate returns, and $24,400 for married couples filing jointly.
- Exempt Amount of Wages, Salary, and Other Income: The dollar amount used to apply to tax levies for years when the personal exemption amount is zero.
- Foreign Earned Income Exclusion: The foreign earned income exclusion amount is $105,900.
- Medical Savings Accounts: The annual deductible for self-only coverage in a medical savings account increases to not less than $2,350, and not more than $3,500. The maximum out-of-pocket expense amount is $4,600. The annual deductible for family coverage in a medical savings account is $4,650 and not more than $7,000. The out-of-pocket expense amount is $8,550.
- Qualified Small Employer Health Reimbursement Arrangement: To qualify, the total amount of the payments and reimbursements for any year cannot exceed $5,150 ($10,450 for family coverage).
FICA Rate and Wage BasesUpdated 10/23/2018
- The Social Security wage base for 2019 is $132,900. The FICA contribution rate is 6.2%. For the Medicare (HI) portion of the FICA taxes, there is no wage base and all wages earned are subject to the HI tax, which is also paid by employers and employees. Each pays at a 1.45 percent rate, although employees pay an additional 0.9 percent on wages greater than $200,000 for individuals, $250,000 for married couples filing jointly, and $125,000 for married couples filing separately. There is a 2.8 percent cost-of-living adjustment for 2019, affecting several thresholds for benefits and coverage.
FUTA Credit ReductionsUpdated 11/15/2018
- U.S. Virgin Islands – 2.4% FUTA credit reduction.
2019 SUTA Wage BasesUpdated 12/11/18
- Alaska: $39,500 to $39,900
- Colorado: $12,600 to $13,100
- Hawaii: $45,900 to $46,900
- Iowa: $29,900 to $30,600
- Kentucky: $10,200 to $10,500
- Minnesota: $32,000 to $34,000
- Missouri: $12,500 to $12,000
- Nevada: $30,500 to $31,200
- New Mexico: $24,200 to $24,800
- North Carolina: $23,500 to $24,300
- North Dakota: $35,500 to $36,400
- Oklahoma: $17,600 to $18,100
- Oregon: $39,400 to $40,600
- Utah: $34,300 to $35,300
- Washington: $47,300 to $49,800
- Wyoming: $24,700 to $25,400
Tax Brackets and Rates
|Rate||For Unmarried Individuals, Taxable Income Over||For Married Individuals Filing Joint Returns, Taxable Income Over||For Heads of Households, Taxable Income Over|
The personal exemption for 2019 is eliminated.
|Filing Status||Deduction Amount|
|Married Filing Jointly||$24,400|
|Head of Household||$18,350|
Alternative Minimum Tax Exemptions
|Filing Status||Exemption Amount|
|Married Filing Jointly||$109,400|
Alternative Minimum Tax Exemption Phaseout Thresholds
|Married Filing Jointly||$1,000,000|
Earned Income Tax Credit
|Filing Status||No Children||One Child||Two Children||Three or More Children|
|Single or Head of Household||Income at Max Credit||$6,800||$10,200||$14,320||$14,320|
|Phaseout Ends (Credit Equals Zero)||$15,310||$40,402||$45,898||$49,298|
|Married Filing Jointly||Income at Max Credit||$6,800||$10,200||$14,320||$14,320|
|Maximum Credit||$520 ||$3,468||$5,728||$6,444|
|Phaseout Ends (Credit Equals Zero)||$21,000||$46,102||$51,598||$54,998|
WithholdingFor 2019, the amount of one withholding allowance on an annual basis is $4,200. The withholding allowance amounts by payroll period are:
- Weekly: $80.80
- Biweekly: $161.50
- Semimonthly: $175.00
- Monthly: $350.00
- Quarterly: $1,050.00
- Semiannually: $2,100.00
- Daily or miscellaneous (each day of payroll period): $16.20
How APS Can Help
APS’s payroll tax compliance experts handle all of paperwork and filings for payroll taxes, keeping you in compliance:
- Preparation of your quarterly tax payments and filings.
- System update of federal tax tables each year.
- Year-end payroll processing assistance.
The information on this page is subject to change at any time based on tax regulation updates. To stay current on payroll processing issues and payroll tax news, subscribe to the APS Blog.