The Internal Revenue Service on Friday alerted employers they can stop withholding their workers’ portion of the federal payroll tax beginning Sept. 1, the implementation of President Donald Trump’s executive order intended to give the economy a boost amid the novel coronavirus-caused slowdown.
The action delays the collection of the 6.2% of wages employees – who make less than $104,000 a year – pay for Social Security from between Sept. 1 and Dec. 31 to between Jan. 1 and April 30.
While the move will give households more take home pay for the next four months, the tax will still have to be paid in the first four months of 2021, unless Congress waives the tax, which Trump has asked it to do.
Considering the measure will likely pressure lawmakers into approving the measure, or face constituents who do not wish to pay the money back, Democrats have decried it as a “gimmick,” The Wall Street Journal reported.
Trump’s decision to unilaterally implement the payroll tax deferral followed the breakdown of negotiations with Democrats, particularly in the House, on another round of coronavirus relief/stimulus. Trump sought the deferral as part of a $1.1 trillion package, a much less costly proposal than the more than $3 trillion sought by the Democrats.
On Friday, White House Chief of Staff Mark Meadows said Trump was willing to accept a $1.3 trillion package, but, he said, House Speaker Nancy Pelosi of California was still demanding nothing less than $2.2 trillion.
© 2022 Newsmax. All rights reserved.