House of Representative employees won’t see a change in their paychecks, despite President Donald Trump’s recent order that allows employers to defer payroll taxes for employees.
A top House official told Politico that House employees won’t have their payroll taxes deferred.
The temporary tax deferral "would not be in the best interests of the House or our employees," Philip G. Kiko, the chamber's chief administrative officer, wrote in a memo.
Kiko noted that the House Administration Committee agreed.
Trump’s order allows employers to not require employees earning less than $104,000 a year to pay a 6.2% tax that goes toward Social Security.
Trump issued the deferral order in August as a way to help improve the economy amid the coronavirus. The move would allow workers to keep more money in their wallets, temporarily.
But the tax deferral wasn’t widely accepted by employers in the private sector. Many companies expressed concerns that it would too complicated to implement, especially if employees would still be on the hook for paying back the amount that was deferred.
Ultimately, it would be up to Congress to determine whether employees have to pay back the taxes or not when the deferral period ends. The uncertainty of what will happen was raised by Kiko in his memo.
"The taxes are deferred, and absent subsequent action by Congress, employees still owe, and employers are still required to collect the taxes," he wrote. "Starting in January of 2021, employers would be required to begin withholding taxes from paychecks at higher rates to fully collect the tax owed by April 30, 2021. Like all pay disbursing officials, the CAO must weigh the benefit of the deferral against the challenges of implementing this change and the practical impacts to the House workforce."
The Trump administration has said the deferral would be applied to the paychecks of executive branch employees and military members.
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