Kara McGuire writes about all things related to personal finance. Follow our coupon clipping, retirement saving, bargain hunting, budget mama as she saves, spends and searches for ways to keep more money in her wallet – and yours.

Payroll tax cut: $2.2 billion in MN

Posted by: Kara McGuire under Taxes, The economy Updated: November 30, 2011 - 12:24 PM

A new report from the Office of Tax Policy found the 2011 payroll tax cut put $2.2 billion in the pockets of 3.1 million Minnesotans.

Families making $50,000 per year saw about $1,000 extra in their paychecks.

Nationally, the payroll tax cut part of the stimulus bill of 2010 meant a tax cut for 159 million workers totaling $109 billion.

The idea behind the tax cut, which expires at the end of the year, is to stimulate the economy by putting a little more cash in people's wallets.

I saved an extra 2 percent more in my 401(k). Sorry, fellow Americans.

What did you do with your tax cut? Did you even notice it?

President Obama is proposing an extension and increase of a payroll tax cut going into 2012. According to the Treasury report, cutting the payroll tax to 3.1 percent  in 2012 would amount to $178.8 billion in the pockets of 161.2 million Americans. The family making $50,000 would see an additional $550 in their paychecks over what they saw this year.

In Minnesota, 3.2 million residents would see $3.7 billion.

According to the Wall Street Journal, Republican leaders are cool with the extension of the 2011 4.2 percent payroll-tax cut but not lowering it to 3.1 percent, half of the 6.2 percent standard payroll tax.

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