Uncertainty surrounds executive order payroll deferral

From Wipfli. On August 8, President Trump signed an executive order temporarily delaying the withholding, deposit and payment of the employee contribution of Social Security payroll taxes from September 1 to December 31. The order is only applicable to those employees that make less than $104,000 annually. President Trump’s executive action suspending the employee portion…

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From Wipfli.

On August 8, President Trump signed an executive order temporarily delaying the withholding, deposit and payment of the employee contribution of Social Security payroll taxes from September 1 to December 31.

The order is only applicable to those employees that make less than $104,000 annually.

President Trump’s executive action suspending the employee portion of the payroll tax won’t be mandatory for businesses, according to Treasury Secretary Steven Mnuchin.

“We can’t force people to participate, but I think many small businesses will (participate) and pass on the benefits,” Mnuchin said August 12 on Fox Business.

The order creates uncertainty for employers because the taxes are only deferred, not eliminated. As stated in the order, the president will urge Congress to pass legislation forgiving the deferred tax.

Additionally, it is uncertain who decides to defer the employment taxes. Is it a decision made by the employer or is it made on an individual basis?

See the complete post from Wipfli online.

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