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Post by generalsherman on Aug 29, 2020 0:14:30 GMT -5
Does anyone know if those of us in the employ of Uncle Sam will get the “benefit” of this tax deferral?
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Post by christina on Aug 29, 2020 5:56:28 GMT -5
If it comes due in 2021 that will make an unpleasant 2021 for a lot of people.
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Post by roymcavoy on Aug 29, 2020 7:15:50 GMT -5
I can’t find the link now, but I read a more in-depth story that said the IRS had given guidance that the deferral would have to repaid by employers (not employees) in early 2021. I’d imagine this would mean good news for federal employees and bad news for small/medium/large businesses.
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Post by Ready-Now! on Aug 29, 2020 9:24:16 GMT -5
From the article at the top of this thread it seems this is an option for employers and not a mandate.
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Post by Ready-Now! on Aug 29, 2020 9:26:18 GMT -5
The federal government may be the only employer to opt in if it is truly voluntary.
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Post by Thomas fka Lance on Aug 29, 2020 9:47:46 GMT -5
If it comes due in 2021 that will make an unpleasant 2021 for a lot of people. If employees have to pay it back, they will be upset in 2021. If they don't have to pay it back, they will be upset when the 'devil comes for his due' before 2034. The latest projection has the Social Security trust funds (retirement and disability) running out of cash reserves by 2034. With no income, that day will arrive before 2034. If the employers are to bear the sole responsibility to pay it back, most employers cannot afford to absorb it entirely, and will be forced to increase their prices. So any "income increase" will most likely be offset by higher costs. |
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Post by Thomas fka Lance on Aug 29, 2020 10:04:02 GMT -5
Does anyone know if those of us in the employ of Uncle Sam will get the “benefit” of this tax deferral? Yes, for some. There was a National Finance Center Customer notification, dated August 21, 2020, that stated modifications will be made to the payroll/personnel system effective in pay period 17, the first pay period after September 1. They will eliminate OASDI from employees checks who earn less than $3,999.99 per pay period, for those who have it deducted as some feds do not. That figure appears to be based solely on base-salary, not including OT. |
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Post by shoocat on Aug 29, 2020 14:05:48 GMT -5
If it comes due in 2021 that will make an unpleasant 2021 for a lot of people. Most people probably won't pay attention and think it is a great deal not realizing there will be payback and how that will impact them. |
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Post by Pixie on Aug 29, 2020 17:51:55 GMT -5
If it comes due in 2021 that will make an unpleasant 2021 for a lot of people. Most people probably won't pay attention and think it is a great deal not realizing there will be payback and how that will impact them. That's the first thing I thought of. Pixie |
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Post by nappyloxs on Aug 31, 2020 20:14:51 GMT -5
Odds are Congress will end up waiving it.
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Post by lurkerbelow on Sept 1, 2020 13:28:09 GMT -5
Any word on being able to opt out of this and paying the government on time?
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Post by nylawyer on Sept 1, 2020 15:16:24 GMT -5
Any word on being able to opt out of this and paying the government on time? Why would you? Worst case scenario is it is an interest free loan for a few months. And, as Nappyloxs noted above, there is a real chance Congree will ultimately not require the repayment. |
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Post by phoenixrisingALJ on Sept 2, 2020 9:45:11 GMT -5
My question is -why? I’m all for aid for those impacted by Covid. But this tax cut helps those who have jobs. Those who have jobs during this pandemic don’t need this assistance. It does nothing for those unemployed while also jeopardizing SS. I’m just trying to understand the logic.
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Post by fowlfinder on Sept 2, 2020 10:12:09 GMT -5
My question is -why? I’m all for aid for those impacted by Covid. But this tax cut helps those who have jobs. Those who have jobs during this pandemic don’t need this assistance. It does nothing for those unemployed while also jeopardizing SS. I’m just trying to understand the logic. While I don't agree with the policy as it is applied in this situation, I believe the idea is to put more money in worker's pockets so they will spend more, providing a stimulus to the economy, the "get more money circulating" economic theory. (And thereby result in an increase to employment). Will it work? Who knows, spending habits right now are linked to so much more than how much money you have available to spend, if you hare worried about getting sick, you don't dine out even when you financially can. |
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Post by jimmyjiggles on Sept 2, 2020 10:13:06 GMT -5
Any word on being able to opt out of this and paying the government on time? Why would you? Worst case scenario is it is an interest free loan for a few months. And, as Nappyloxs noted above, there is a real chance Congree will ultimately not require the repayment. I think the worst case scenario is you forget to/fail to pay the accrued tax liability, lose your job, and go to prison for tax evasion where you are brutally tortured and killed by other inmates. Not worth the negligble temporary pay bump to me. |
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Post by nylawyer on Sept 2, 2020 11:29:31 GMT -5
You may not be able to forget, I've read that they will withhold extra next year to make up the difference.
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Post by lurkerbelow on Sept 2, 2020 13:47:17 GMT -5
You may not be able to forget, I've read that they will withhold extra next year to make up the difference. I'm not and shouldn't have to rely on this. We are WITHOLDING the payroll tax, correct? That is an optional witholding that we direct with the W-4 form we sign when we are employed. This process is described by statute. We have a right to adjust it as we wish with the employer. So, what happens to my W-4 form? Is my witholding being changed by this executive order? Can I change it back? Why does the government get to adjust my chosen witholdings for FICA etc? I'm a citizen and can pay taxes however I want. This payroll tax crap is literally showing me my own money that would have been withheld by my own choice and then telling me that Uncle Sam is going to gift my own money back to me.  That's part of why I want an opt out (other parts may not be printable...). I don't trust this process, scarce as it is, plain and simple. Promises to pay me back by a divided Congress after election are charming but far from reassuring. |
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Post by jagvet on Sept 2, 2020 14:08:54 GMT -5
Guys, chill out. Maybe you'll get a little extra cash and maybe not. Let someone else worry about the paperwork and all that stuff. It's a few hundred max. Y'all need to get a life!
Just thank the Almighty you have a job (if you do)! Just think if you were a California hair stylist and you didn't do Pelosi's hair. You'd be eating cat food and not at all thinking about W-4s.
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Post by jimmyjiggles on Sept 2, 2020 14:35:27 GMT -5
You may not be able to forget, I've read that they will withhold extra next year to make up the difference. I'm not and shouldn't have to rely on this. We are WITHOLDING the payroll tax, correct? That is an optional witholding that we direct with the W-4 form we sign when we are employed. This process is described by statute. We have a right to adjust it as we wish with the employer. So, what happens to my W-4 form? Is my witholding being changed by this executive order? Can I change it back? Why does the government get to adjust my chosen witholdings for FICA etc? I'm a citizen and can pay taxes however I want. This payroll tax crap is literally showing me my own money that would have been withheld by my own choice and then telling me that Uncle Sam is going to gift my own money back to me. That's part of why I want an opt out (other parts may not be printable...). I don't trust this process, scarce as it is, plain and simple. Promises to pay me back by a divided Congress after election are charming but far from reassuring. Yup, I'd rather just keep having it withheld than rely on the ever shifting promises out of DC. I don't mess with the IRS. The payroll tax holiday is just a dumb idea all the way around. As someone above said, as stimulus its not that great because you are only stimulating those who are already working. And it is only temporary, so really you aren't stimulating anything for a durationally relevant period of time. Politically it sucks. You get fairly mild tax "relief" as a tax payer. When Obama did it in 09, I did not even notice the difference in my check. But when it sunseted, everyone was moaning that "Obama raised my taxes." So he basically got blamed for raising taxes as his reward for giving this tax "holiday." Not sure why anyone would want to repeat that mistake. Oh and it bankrupts the trust fund. Lots of downside, but I suppose someone making more than me has this figured out. |
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Post by nylawyer on Sept 2, 2020 14:57:06 GMT -5
(responding to lurkerbelow, who had the last post when I started typing)
I don't think this is accurate. You can adjust withholdings on income tax; your employer is mandated to withhold payroll taxes such as Social Security and Medicare. I don't believe you get any say in this; a certain percentage is withheld each paycheck, unless and until the employee hits the annual cap, at which point the employer stops withholding until the next year.
This is somewhat unprecedented, so I don't know that there is any mechanism to direct your employer to withhold taxes that the government doesn't want right now.
To be clear, I'm not advocating for or against this decision by POTUS. As a litigator I can certainly argue either way, and while I have an opinion (a fairly strong one) about the wisdom of it, I choose to keep that to myself.
My only point is that there is really no harm to any employee, as long as they are aware that they may have to give the money back (with one poyential exception that I do not know how will be handled, which is the employee who is no longer working come 2021 and doesn't have earnings to withhold.
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