FICA Tax Withholding issues

MESSAGE FROM CENTRAL PAYEROLL BUREAU 

2022 FICA Tax Withholding (PPE 01/01/22)

Through a post-audit process, Central Payroll Bureau (CPB) learned that highly compensated employees’ January 7th paychecks had FICA tax withholding amounts that were less than they should have been.  CPB discovered that a glitch in its system prevented the full FICA tax amount from being withheld.  FICA taxes are calculated based on Social Security wage limits.  For tax year 2021, the limit was $142,800.  For tax year 2022, the limit is $147,000.  Our system captured 2021’s YTD Social Security wage balance and only calculated Social Security taxes on $4,200 which is the difference between the 2 years. 

 Please note that this issue has been fixed.  In PPE 01/15/22 (pay date 01/21/22), impacted employees will see an increase in their FICA taxes to collect all FICA tax shortfalls that were missed in the previous pay.  In PPE 01/29/22 (pay date 02/04/22), impacted employees will see their correct FICA tax withholdings.  Employees and agencies do not need to do anything to correct PPE 01/01/22 because FICA taxes will self-adjust through their paychecks dated 01/21/22. 

 If you have any questions, please contact our CPB Accounting Team via email CPBACCTG@marylandtaxes.gov or phone (410) 260-7964.

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