"The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012.
Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2 percent of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).

This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision.

Employees should consult with their personal tax advisor regarding the specific tax impact as it varies based on individual facts and circumstances.

Managers, please provide a copy of this notice to your employees without e-mail access.

U.S. Payroll Services"

The way I read this is that you will pay 4.2% into SS until you reach the 110,100/12 (9175x2) number of 18,350 for two months. So in actuality it is still a tax cut until you reach said amount during Jan-Feb months then the rest is taxed at the normal rate of 6.2%. I would imagine that the total amount paid into SS will be reduced by the difference between $770.70 and $1137.70 which is $367 dollars if you make at least $110,100.

It's funny, but as I remember it the republicans were against any Soc Sec payroll tax cut at all, and the dems got them to at least do this for 2 months. Eitherway, this should save the neediest of FDX pilots at least $367 which if we got what I think I remember the White House wanting (another year of 4.2%) would have saved us $2202 like last year.