In the case of COVID, people should be made whole as much as possible. Complaining about “free stuff” is kinda silly for someone who supported Nancy’s xmas tree ornament bill.
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once again you are confused. The law allows the President to defer it. He has done so. He has done so and ordered that the deferred payments (employee share) be made available to the employee. The requirement to with hold, under the law, is deferred. the requirement under the law to make the funds available to the employee is just that, a requirement. You think you know employment law, but you don’t. It is the law that allows the President to do this, and the law that requires employers to follow it.
zantax
204
Where do you think he learned it in the first place?
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I was in fact confused. The guidelines I linked and referenced refer to the prior legislated payroll tax deferral that was part of the CARES act. I’ll make a clarifying note in that post.
I don’t think the IRS has published guidelines yet for this memorandum.
Although these guidelines do indicate the depth of complication for those responsible for formulating a payroll. If the current guidelines are not already prepared then the treasury has some work to do.
Just remember, Obama pressuring BP to set up an escrow account to cover their liabilities for the oil spill in 2010 was likened to a Hitler power grab that he would abuse from then on.
I suspect we’re not going to see the same reaction to Trump’s recent nonsense from the same people who made or defended such comparisons.
Safiel
207
People speak so confidently of the law.
Yet.
Republican Senator Ben Sasse strongly condemned the action. Numerous other Republican Senators have followed his lead.
National Review condemned the action.
Heritage Foundation (which far more often than not has supported President Trump) condemned the action.
So the “lib” argument won’t work.
And most large companies are going to continue collecting the payroll tax and remitting it on schedule to the Treasury as the statute requires.
When conservative groups and business interests are not coming on board, that points deeply to the lack of Constitutional and legal confidence in the memorandums.
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zantax
208
Where was their condemnation when he used the same exact authority to push back the 2019 federal tax due date?
WCD9973
209
You are very confused.
Lets be clear -the President has NO power over individual companies payroll dept. Honest question -Have you read the EO? Its pretty clear. It has NO instruction to private companies or payroll companies. It simply instructions the Treasury dept to defer collecting this payment. I have made NO argument that the president cant do this. I have even said in different thread that I think its 100% legal.
But that has NOTHING do with what is being discussed.
Employers are legally responsible for collecting payroll taxes from their employees. That is the law. That law has not changed.
What trump did is the treasury will not collect these funds from Aug 1st to Dec 31st. He then ASKS (Cause that is all he can do) is for employers to not collect that money during this time and collect it later if needed.
The EO also says there will not be any penalties or interest on this amount deferred. So basically -if not forgiven - Employers are responsible for collecting it.
So -If not forgiven by Dec 31st and Employers did not take it out during this time, they will need to take it out of the employees check come January, prob all at once.
None of this is a argument to anyone who was read the EO and understands. End of day - Employers have 2 choices.
1 -Continue to withdrawal the money from employees paycheck, 100% legal (and IMO the smart move) and keep it in escrow or even submit it to the IRS and get a refund if forgiven later
2- Stop withdrawing it and risk that when the EO expires, they will then have to tell their employees that their next paycheck (Or next 2, or next 3) will withhold the full amount that was deferred.
If you think choice 1 is illegal or that Trump somehow can issue a EO the forbids it - you are just mistaken.
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Nemesis
210
I was discussing this with my team today. Many of them did not realize this was only a suspension and if the cuts do not become permanent they will become due at tax time.
My suggestion was to look at your paycheck and calculate the amount you would have paid between now and 12/31. If your tax refund is normally bigger than that then your in a good place and just expect to get a smaller refund. I know its not 100% but its not a bad yardstick.
If like me you dont get a tax refund (i refuse to give the government an interest free loan) then I suggested you dont spend that extra money.
The problem is the unknown. Will they become permanent?
Safiel
211
What Trump pushed back was not the tax due dates. He pushed back the tax reconciliation deadline. Form 1040 is tax reconciliation form. Determining whether the amount you paid in taxes during the preceding year matches to what you actually owe the government.
For the vast majority of people, they overpaid and are due a refund. It is in their benefit to file as soon as possible and claim their refund. Unless they are missing information because of COVID-19, delaying filing beyond April 15th is stupid.
For the small minority of people, like myself, and underpayment situation exists and we owe the IRS a small amount of money. The actual taxes were due during the proceeding year, quarterly and those dates were NOT pushed back. But you can underpay by a certain amount without incurring a penalty. For me, the underpayment was relatively trivial, about $200.00, about the same as I do every year. I can hold my tax returns and payment beyond April 15th this year because of Trump’s extension. The benefit to people like myself is trivial because the amount of reconciliation is trivial. I pay the bulk of my taxes quarterly during the year and THOSE due dates are NOT postponed.
Trump’s actions in this respect mainly benefit those who may have had paperwork delays due to COVID-19. Economically, the impact is so trivial as to be non-existent.
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WuWei
212
Ben Sasse and his colleagues didn’t do their jobs.
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Question for guys @Nemesis and @Safiel
So let’s say and employer doesn’t take out the employees portion of income tax and FICA (Social Security and Medicare). Come tax time we submit out income tax returns and would be cutting a huge check to Uncle Same.
But that is just for Income Tax. Come January how would employees and employers have to pay FICA and their portion of Income Tax. Not the income tax will wash out in April, don’t know yet how they are going to not include the late penalties and fees, but that is a different question.
Will the administration bill the individual employer will be required to take a big chuck of money out of EE checks?
Will the administration bill the employer for their portion and separate will the employee for money they’ve already received?
If the employer holds the money in escrow, and then the deferment becomes forgiven, will the money just be given to the employee?
If the employer withholds the money and sends it to the Treasury, and the deferment becomes permanent, will the Treasury remit those payments back to the employer and employee?
.
.
.
.WW, PSHS
Nemesis
214
These are all great questions and I do not know the answer. Our payroll finance dept told me they are still researching all the implications and have yet to make a decision on how to proceed.
@Safiel definitely seems to be a decision maker at his company so I am sure he has a much better understanding of this.
This has the potential to become a huge mess.
zantax
215
None of which explains why it was ok to use it for that and not this pr why they didn’t criticize it.
WCD9973
216
Just to be clear, nothing in the EO talks about income tax.
The EO is ONLY about Social security and Medicare tax. Commonly refereed to as “Payroll tax”
As for the rest of the question - I would venture that the Treasury will come out with guidelines soon. Payroll taxes are a little different and with income tax, a company is only required to with hold the amount the employee instructs them to. (A employee can select to fill out their w9 as exempt and have the employee withhold no taxes at all). But payroll tax is the responsibility of the employer.
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I came across some commentary from Pete Isberg, a VP at ADP:
The rollout itself may be expensive and time-consuming for businesses. The payroll tax rate does not usually change in the middle of the year, Isberg said, and the shift would require businesses to reprogram computer systems that can be balky.
“Things of this magnitude normally take six months or so for orderly programming,” Isberg said. “So there will be some employers that just never get this done just from a technical perspective if they have systems that are old or difficult to maintain.”
Minnesota employers have more questions than answers on Trump’s payroll tax deferral
Not rocket science, but does take time and planning, and the clock is already ticking waiting on Treasury to issue guidelines.
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What payroll system do you use in your company?
Samm
219
That sounds as silly as spending for the children. 
Samm
220
Not without an act of Congress and signature of the POTUS.
I don’t see this becoming a reality. If it does, I will have to put my tax debt aside, because the IRS will demand it eventually. The Executive Branch does not control the purse.
