Payroll Tax "Holiday"

[awpitt]

On August 8, 2020. Trump singed a Presidential Memorandum ordering that that payroll taxes (Social Security/FICA) are to be deferred for the pay periods between September 1, 2020 and December 31, 2020.

This action is for anyone who has a gross income of less than $104,000 per year. It is a requirement for Federal Civil Service employees and for members of the military. For the private sector, it is up to the employer as to whether or not they want to do this.

It is interesting that this is being done now as we head into the last stages of the election season. Why? Because this is not a tax cut. Nor is it a tax forgiveness. It is a tax deferment. What does that mean?

Well, it means that if you fall into one of the groups mentioned above, your paycheck will increase by about 6.2% between now and December 31, 2020. After that, your paycheck will return to normal. The other part that you need to be aware of is that all of the tax that will be deferred between now and December 31, 2020 will have TO BE PAID BACK when you file your 2020 Income Tax Return on or before April 15, 2021.

So, if you find, on your pay stub, that no Social Security/FICA are being taken out. You should put that money in savings and keep there until it’s time to file your tax return in the Spring. For those in the private sector, you can talk to your employer’s HR/Payroll department and see if you can “opt” out.

If you do nothing, you will have to pay all that money back when you file your 2020 Tax Return on or before April 15, 2021.

Here is a link to the IRS information on this matter…

https://www.irs.gov/pub/irs-drop/n-20-65.pdf

 

[wubbles]

Really was perplexed when I saw this a couple weeks ago. It's not really doing much to help and will likely end up causing problems for people that aren't paying attention or think they have a larger budget.

 

[GURPS]

So, if you find, on your pay stub, that no Social Security/FICA are being taken out. You should put that money in savings and keep there until it’s time to file your tax return in the Spring. For those in the private sector, you can talk to your employer’s HR/Payroll department and see if you can “opt” out.

My employer declined to make this move globally for the entire company

 

[KingFish]

Unfortunately I cannot opt out. Will have to set it aside.

 

[awpitt]

My employer declined to make this move globally for the entire company

Good. I'm checking with my employer tomorrow.

 

[awpitt]

Unfortunately I cannot opt out. Will have to set it aside.

Well, at least you know now, what you need to do.

 

[awpitt]

Really was perplexed when I saw this a couple weeks ago. It's not really doing much to help and will likely end up causing problems for people that aren't paying attention or think they have a larger budget.

It seems like more of an election ploy than anything else. Doesn't make sence to put money into people's paychecks if they're just going to get screwed when it's time to file taxes. Trump is hoping this will get him more votes now and people won't have a clue as to what awaits them in April 2021.

 

[KingFish]

It seems like more of an election ploy than anything else. Doesn't make sence to put money into people's paychecks if they're just going to get screwed when it's time to file taxes. Trump is hoping this will get him more votes now and people won't have a clue as to what awaits them in April 2021.

Nothing is ever free. Somebody somewhere is paying for it.

 

[gunsmoke]

Where on Earth do you people get your information? Do NONE of you read anything other than Facebook and Twitter??? For Christ's sake, you even attached the IRS letter AND STILL GO MOST OF YOUR INFO WRONG!!

So let's correct this mess:

On August 8, 2020. Trump singed a Presidential Memorandum ordering that that payroll taxes (Social Security/FICA) are to be deferred for the pay periods between September 1, 2020 and December 31, 2020.

This action is for anyone who has a gross income of less than $104,000 per year.

No, it does not say $104k per year. It says

if the amount of such wages or compensation paid for a bi-weekly pay period is less than the threshold amount of $4,000

. The pay period is bi-weekly not annual. If you are an 1099 type you have a lot of discretion by the way this is worded. Anybody care to figure out what "generally less than $4000" is?? That was the inept wording of the Presidential Memorandum---remember you all hated the last President for governing by Executive Order and Presidential Memorandum!!

It is a requirement for Federal Civil Service employees and for members of the military. For the private sector, it is up to the employer as to whether or not they want to do this.

It is not required for employees. It is at the discretion of the employer--who is the entity that is ulimately on the hook for paying this tax. The Federal Govt has agreed--at the instance of the Trump Administration--to implement this idiotic scheme.

It is interesting that this is being done now as we head into the last stages of the election season. Why? Because this is not a tax cut. Nor is it a tax forgiveness. It is a tax deferment. What does that mean?

It is not interesting, it is a blatant political ploy.

Well, it means that if you fall into one of the groups mentioned above, your paycheck will increase by about 6.2% between now and December 31, 2020. After that, your paycheck will return to normal. The other part that you need to be aware of is that all of the tax that will be deferred between now and December 31, 2020 will have TO BE PAID BACK when you file your 2020 Income Tax Return on or before April 15, 2021.

No moron....you don't pay it back when you file your taxes. The IRS document YOU posted clearly states that the deferred payroll taxes are to be paid back FROM WAGES AND COMPENSATION BETWEEN JAN 1, 2021 and April 30, 2021.

Here is how this will actually work for those employees whose employer is dumb enough to do this:

1. No payroll taxes withheld between now and end of 2020.
2. Jan 1, 2021, the normal payroll tax is restarted.
3. Jan 1, 2021: the deferred payroll tax is added to your taxation.
4. So between Jan 1 and April 30, 2021, you will see a MASSIVE tax increase.
5. Make sure to thank our incompetent President for this.

So, if you find, on your pay stub, that no Social Security/FICA are being taken out. You should put that money in savings and keep there until it’s time to file your tax return in the Spring. For those in the private sector, you can talk to your employer’s HR/Payroll department and see if you can “opt” out.

Wrong on all counts.

If you do nothing, you will have to pay all that money back when you file your 2020 Tax Return on or before April 15, 2021.

Wrong

Here is a link to the IRS information on this matter…

https://www.irs.gov/pub/irs-drop/n-20-65.pdf

https://www.irs.gov/pub/irs-drop/n-20-65.pdf

Please go read the IRS letter you poster. You might actually learn something. You can read the determination letters from the Treasury. They both say the same thing. Neither of them state what you posted.

 

[awpitt]

Where on Earth do you people get your information? Do NONE of you read anything other than Facebook and Twitter??? For Christ's sake, you even attached the IRS letter AND STILL GO MOST OF YOUR INFO WRONG!!

So let's correct this mess:

So, what is your point? You offered nothing to dispute anything that was posted. Is the IRS wrong?

 

[BernieP]

All employers, from various sources, have been telling people it's coming.
Consider it a loan, if you don't want it, don't take it, but remember you have to pay it back.
My guess is that since most people overpay their income tax, the IRS will simply move that refund to cover the FICA payment due.
Regardless, it's been in the news, if you work for DoD the services are pushing out the information, as well as the civilian commands.

 

[awpitt]

All employers, from various sources, have been telling people it's coming.
Consider it a loan, if you don't want it, don't take it, but remember you have to pay it back.
My guess is that since most people overpay their income tax, the IRS will simply move that refund to cover the FICA payment due.
Regardless, it's been in the news, if you work for DoD the services are pushing out the information, as well as the civilian commands.

Actually, NO. Most people are not aware of it and now Trump is trying to our military members as pawns for his re-election efforts. He is not a good person.

Trump Says Troops Won’t Have to Pay Back Deferred Payroll Taxes -- If He Wins

 

[itsbob]

Where on Earth do you people get your information? Do NONE of you read anything other than Facebook and Twitter??? For Christ's sake, you even attached the IRS letter AND STILL GO MOST OF YOUR INFO WRONG!!

So let's correct this mess:

What does 4,000 times 26 equal??

 

[itsbob]

Actually, NO. Most people are not aware of it and now Trump is trying to our military members as pawns for his re-election efforts. He is not a good person.

Trump Says Troops Won’t Have to Pay Back Deferred Payroll Taxes -- If He Wins

Actually, Trump can defer the taxes, it's up to the House and Senate if they have to pay it back.. It COULD be a huge help to our military members, IF congress decides to do something for them too, and not just give all the unemployed an extra $600 every pay day.

 

[UglyBear]

It seems like more of an election ploy than anything else. Doesn't make sence to put money into people's paychecks if they're just going to get screwed when it's time to file taxes. Trump is hoping this will get him more votes now and people won't have a clue as to what awaits them in April 2021.

If you haven’t noticed, most people are not very smart.
There will be a lot of “hey, we is rich now! Time for a trip to Marlo’s to change our (perfectly functional) furniture! Put it all on credit!”.

 

[General Lee]

I just heard a blip about this the other day, and what was explained to me was that people's payroll tax deductions will be doubled in order to pay back the deferment, come 2021.

 

[GURPS]

Good. I'm checking with my employer tomorrow.

Yep a short concise email went out explaining why ... it is a deferment not a forgiveness so there was no point.

 

[SamSpade]

Where on Earth do you people get your information? Do NONE of you read anything other than Facebook and Twitter??? For Christ's sake, you even attached the IRS letter AND STILL GO MOST OF YOUR INFO WRONG!!

So let's correct this mess:

No, it does not say $104k per year. It says

Two things. Itsbob answered one - "What does 4,000 times 26 equal?? ". Answered.

Second - I don't know if you work for the federal government - but I do - and a lot of us do - and all of us have been informed about how it pertains to each of US. And it's the kind of information we pay attention to.

It's enough that you waste bandwidth with tirades bereft of any actual substance - most of them are insults, assumptions and assertions with scant or (usually) zero evidence. But it really ought to be embarrassing to loudly proclaim something that is clearly and objectively shown as completely wrong.

I don't ignore you because your words offend - I ignore because it's just easier to read without the clutter.

 

[PrchJrkr]

My boss threw this news out for discussion last week and nobody is going to "defer". He pays well enough and none of us see any real benefit.

 

[Gilligan]

My boss threw this news out for discussion last week and nobody is going to "defer". He pays well enough and none of us see any real benefit.

My boss is going to take the deferred payroll tax money and go on a well-deserved vacation in the Caribbean...