WASHINGTON D.C. — Beginning today, some people may see more money in their paychecks as a result of President Donald Trump’s executive order to defer the payroll tax on social security, however that extra money you may be getting today will be owed early next year, if action is not taken by Congress.
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The executive order reads, “the deferral shall be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods.”
The order impacts wages made between Sept. 1 and Dec. 31. It also directs the Secretary of the Treasury to explore avenues, including legislation, to eliminate the obligation to pay the taxes that are being deferred. If no action is taken, the money that is deferred will be owed by tax payers.
“Obviously that will take an action of Congress and I personally would support waiving those dollars,” said Rep. Mike Turner (R-Dayton). “People need help and assistance.”
Federal tax guidance from the IRS reads that the deferred taxes will be owed and will have to be paid between Jan. 1 and April 30.
Sen. Sherrod Brown’s (D-Ohio) office calls the President’s executive order a “fake tax cut that has to be paid back.”
“This is a stunt that could result in a massive bill for the American people down the line,” Brown’s office said, adding that the Senator is continuing to push for an additional coronavirus relief package.
The social security payroll tax is taken out at a rate of 6.2 percent, which means you would owe $62 per $1,000 earned in your paycheck.
Cox Media Group
