[WOBBLY BOB]

Won’t the 2% reduction in Social Security tax now be subjected to state and federal income taxes? IE: if I make $40,000 annually, there would be an additional $800 in income that would be taxed by the federal and state governments.

Essentially, I don’t gain a net $800 , but a smaller amount due to it now having state and federal income taxes applied to it. Yes?

[GeronL]

They also didn’t say yet whether the SS tax would be lowered by that 2% or whether we’d owe it next year. lol.

[bert]

......Won’t the 2% reduction in Social Security tax now be subjected to state and federal income taxes? .....

I don’t think so. SS taxes are not deductible for income tax purposes. Adjusted Gross Income will not be changed and no income tax paid on the windfall. The amount os already taxable as income

[lonestar]

Essentially, I don’t gain a net $800 , but a smaller amount due to it now having state and federal income taxes applied to it. Yes?

Get with Tim Geitner or Charlie Rangel to get an answer to your question.