{"id":2989,"date":"2020-09-01T15:44:32","date_gmt":"2020-09-01T20:44:32","guid":{"rendered":"https:\/\/www.employco.com\/blog\/?p=2989"},"modified":"2020-09-03T16:04:19","modified_gmt":"2020-09-03T21:04:19","slug":"payroll-tax-holiday-starts-today-heres-what-it-means-for-employers","status":"publish","type":"post","link":"https:\/\/www.employco.com\/blog\/2020\/09\/01\/payroll-tax-holiday-starts-today-heres-what-it-means-for-employers\/","title":{"rendered":"Payroll Tax Holiday Starts Today: Here\u2019s What it Means for Employers"},"content":{"rendered":"

Human resources expert comments on President Trump\u2019s newly implemented tax break\u00a0<\/em><\/p>\n

\"TaxStarting today (Sept. 1), employers now have the option to stop withholding payroll taxes for their staff. The Treasury Department announced the option last week, detailing the new guidelines in a statement <\/a>that offers a temporary deferral of the payroll taxes which employees pay into Social Security.<\/p>\n

\u201cEmployers can opt to stop withholding payroll tax, provided an employee makes less than $4,000 on a biweekly pay period,\u201d says Rob Wilson, President of Employco USA and human resources expert. \u201cBut this is only a deferral. Workers will need to repay the taxes by April 2021.\u201d<\/p>\n

Generally, employees and employers each pay 6.2% tax into Social Security, for a total amount of 12.4% per employee. However, under Pres. Trump\u2019s new deferral, employers will have the option of not collecting the employee\u2019s share. As a result, workers could see a bump in their paycheck – but next year, they will have to pay that money back or face financial penalties.<\/p>\n

Wilson, who is the president of a national employment solutions firm, says that this will spell a major human resources headache for employers.<\/p>\n

<\/p>\n

\u201cMany people resisted President Trump\u2019s deferral plan for payroll taxes,\u201d says Wilson. \u201cThe President envisions the economy will receive a boost from employees having extra funds in their paycheck each pay period, but from an HR standpoint, it\u2019s going to be very confusing for employers and add lots of extra steps when it comes to payroll.\u201d<\/p>\n

Wilson says that employers don\u2019t have to take advantage of this payroll deferral option, but if they do, they will be in charge of collecting penalties from their employees if they don\u2019t repay the amount.<\/p>\n

\u201cAnd then you have to consider what happens when the employee no longer works for you. According to the regulations, it will still be the employer\u2019s responsibility to try and collect the funds from the former employee. Tracking down ex-employees isn\u2019t always easy, especially if they are moved or not committed to paying back the tax amount.\u201d<\/p>\n

In addition to these concerns, employment expert Rob Wilson says the notice leaves unanswered questions that may or may not be covered in future guidance from the IRS such as:<\/p>\n