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Senate Approves 3 Percent Government Contractor Withholding Repeal, Sends Bill Back to House

November 17, 2011

Senate recently approved a bill that would repeal required 3 percent income tax withholding on vendor payments by federal, state, and local governments. The Senate version of the bill also contains a new tax credit for employers who hire certain unemployed veterans. The bill now goes back to the House, which approved a different version in October. In February and October letters to Congress, the AICPA urged repeal of the measure, which was enacted as part of the Tax Increase Prevention and Reconciliation Act of 2005, P.L. 109-222. See this JournalofAccountancy.com article for more information.