Payroll Tax Guidance

a reply to: Phage

Makes you wonder if you say to decide to leave the company in December, and join a new one in January, it's going to screw over your employer. That might be an interesting decision to make come Christmas time.

Edit: Not that I would ever do something like that, but what would be the recourse from the employer? Maybe seizure of the last paycheck of the year, which I could see starting a legal issue.

a reply to: Hypntick

Much has been said about this "tax break" also being helpful for employers by reducing their tax burden.

But the "guidance" only refers to withholding, it does not appear that employers are provided the same deferral option as employees. The employer's FICA deposits still must be made in a timely manner.

The deposit obligation for employee social security tax does not arise until the tax is withheld. Accordingly, by postponing the time for withholding the employee social security tax, the deposit obligation is delayed by operation of the regulations. Thus, this notice does not separately postpone the deposit obligation.

Shell game, and the pea is not revealed until after the election.

originally posted by: Phage
The IRS got around to issuing “guidance” on the president’s order regarding deferral of Payment of Social Security and Medicare taxes.
www.irs.gov...

As of next payday, we can stop withholding from paychecks (a total of 7.65% of wages) through the end of the year. However, beginning January 1, we will be required to start making up for the deferral by April 30, presumably by bumping the withholding amounts.

Employees may be expecting more money in their paychecks, but I don’t think that this is a really good idea for them or a company. If any employee is lost before the deferral is covered the company may be on the hook for the amount due. The guidance says, “If necessary, the Affected Taxpayer may make arrangements to otherwise collect the total Applicable Taxes from the employee.” Does that mean we put a lien on the employee? Have "some of the boys" pay them a little visit?

The president’s order is idiotic. But what else is new? I don't think we are going to stop withholding.

Phage where you been?

Seems too complicated to make it worthwhile. Maybe its just a jab to the House to get off their butts and make a good stimulus 2 package.