News Notes: Compensation Social Security Taxes

The Internal Revenue Service has postponed indefinitely a plan to begin collecting Social Security taxes on two types of stock options. Industry groups had complained that the proposed 15.3% tax would be detrimental to incentive stock options and employee stock purchase plans. The payroll taxes, which fund Social Security and Medicare, would be divided between the employer and employee. The Bush administration said that if the rules go forward, employers would get two more years to implement changes before taxes are collected.