An August 8th executive order from President Trump created a payroll tax holiday for the last third of 2020. The program is controversial because unless Congress passes legislation that turns the tax holiday into a tax cut, the deferred taxes will need to be paid back over the first four months of 2021. This would mean that paychecks would have double the usual amount of Social Security taxes withheld. A recent article from Construction Dive examines the issue in detail.
Employers bear the burden of implementing and administering the payroll tax holiday program, explains author Robert Freedman, including communicating to their employees that the money will need to be paid back if the deferral is not turned into a cut. The major issues facing employers include the following:
For further details, click here to read the article in full at Construction Dive.