9/1/20 Update: Payroll Tax Withholding Deferment
I do my best to stay out of the political weeds on this blog. All of you are entitled to your own opinions and NECA only weighs in on political issues that are directly relevant to your business and which, by their very nature, tend to be non-partisan. This particular posting does touch on something with political overtones though because, in this instance, it does have a direct impact on you and your company.
Payroll Tax Deferment
The President’s Payroll Tax Withholding Deferment just went into effect throughout the country today. The official IRS Guidance can be found here. Honestly, we haven’t posted anything on it before this because I was nearly certain it would be determined to be illegal. It still may, but more on that shortly.
Briefly, the Executive Order signed back in August 8th, mandated that the Dept. of the Treasury would allow employers to stop withholding payroll taxes from employee’s biweekly (or equivalent) compensation that is $4000 or less. To be clear, this is determined on a per paycheck basis. If a person's regular pay is $4500 but on one particular pay period it’s $3900, they would be qualified for the deferment that period. The guidance goes on to say that the deferred obligation is only deferred. The employee will have to pay it back to the US Govt. starting next year.
For those of you familiar with the politics of this issue, you’re probably aware it gets even more complicated as the President has said he will forgive these withholdings if re-elected. Politics aside, this isn’t actually a power the U.S. President has and is something that would likely be deemed vote buying if they did. I only bring this up because the promise of having these dollars forgiven in the future may cause some of your employees to pressure you into offering the deferment today.
While most of your employees likely do not fall under the $4k threshold some do, for some pay periods. However it’s entirely up to you and not your employees whether or not you offer the deferment. Additionally, it’s worth keeping in mind that if you do offer the deferment, you will also have to collect the deferred monies through additional withholdings next year.
Again, sorry about the political implications of that content, but I have to advise you on the published policy of the government as opposed to comments made through less formal means by the President. New Terre Haute Inside Agreement
Just a quick reminder to any employers operating in Local 725, the new agreement takes effect next month and has been posted, along with all appropriate wage sheets, on our website in the Labor Relations section of the Members Only portion of our site. As always, be safe and have a great day,