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Company I work at will still withhold federal taxes
Posted on 9/2/20 at 12:25 pm
Posted on 9/2/20 at 12:25 pm
Anyone else’s doing this? Even though Trump ordered not to collect these taxes. They said it’s because if someone quits their job and it wasn’t withheld then the company still has to pay that money if Congress doesn’t forgive it.
My question is what if they withhold and Congress forgives it? Will I get refunded or am I screwed? Cause SS and Medicare taxes aren’t part of the income tax so it won’t balance out in tax season. Would my company be required by law to refund me if they never paid it out?
My question is what if they withhold and Congress forgives it? Will I get refunded or am I screwed? Cause SS and Medicare taxes aren’t part of the income tax so it won’t balance out in tax season. Would my company be required by law to refund me if they never paid it out?
10
Posted on 9/2/20 at 12:27 pm to deltaland
Who said they would stop making you pay taxes? Are you talking about the payroll tax?
Posted on 9/2/20 at 12:28 pm to deltaland
Sounds illegal to me. That can't withhold what isn't theirs.
Posted on 9/2/20 at 12:28 pm to deltaland
Our company isn't doing it until they receive better guidance from the gov/IRS
Posted on 9/2/20 at 12:28 pm to deltaland
Federal Income Tax? Or FICA?
I thought you still paid both....the employer gets to defer their half of the FICA.
I thought you still paid both....the employer gets to defer their half of the FICA.
Posted on 9/2/20 at 12:32 pm to deltaland
The order is optional, not mandatory, so the company can continue to withhold. If they withhold, then legally they must pay.
The company also has a legal obligation to withhold then pay by 4/15 if this is not forgiven. In other words, if not forgiven and the company does not withhold now; there will be a lot of pissed off people when they see that first check in January.
The company also has a legal obligation to withhold then pay by 4/15 if this is not forgiven. In other words, if not forgiven and the company does not withhold now; there will be a lot of pissed off people when they see that first check in January.
Posted on 9/2/20 at 12:33 pm to Sooner5030
I’m not sure how the executive order was written but I understood that FICA was deferred and wouldn’t be taken out of checks.
Doesn’t make sense to just defer the employers half, considering its to stimulate the economy. Putting more money in workers pockets would work better to stimulate the economy
Doesn’t make sense to just defer the employers half, considering its to stimulate the economy. Putting more money in workers pockets would work better to stimulate the economy
Posted on 9/2/20 at 12:36 pm to Weekend Warrior79
quote:
The order is optional, not mandatory, so the company can continue to withhold. If they withhold, then legally they must pay.
The company also has a legal obligation to withhold then pay by 4/15 if this is not forgiven. In other words, if not forgiven and the company does not withhold now; there will be a lot of pissed off people when they see that first check in January.
Ok. So what happens if it’s forgiven? Do the companies and employees get reimbursed what they paid out already?
Posted on 9/2/20 at 12:40 pm to deltaland
It's optional for the company to defer the employee portion of federal withholding. However, the employee would then be responsible for paying all of that back next year. None of my employees wanted that, so we're not changing anything.
Posted on 9/2/20 at 1:08 pm to deltaland
He has not deferred federal income taxes or health payroll taxes. The deferral only applies to the employee-portion 6.2% payroll tax under 26 USC 3201 and 3101(a) (i.e. taxes attributable to social security). As a reminder, the deferral just changes the due date for the taxes as the executive branch only has the power to alter procedural enforcement of laws and not substantive content. However, he cannot change the obligation of a taxpayer to pay the tax (or the amount he pays) or the obligation of the employer to collect those applicable taxes from the employee and remit on the employee’s behalf because those would be substantive changes in the law (a power reserved to the legislature).
All that said simply, if an employer does not continue to withhold these taxes and they are not forgiven, they will be liable for paying them come next year and would be forced to turn around and try to get the taxes paid on behalf of the employees back from the employees. Obviously, this creates a huge clusterfrick from the employer’s perspective. Therefore, I’m anticipating the logical approach from employers will be the continue collecting the tax (because they still have an obligation to) and just distribute it back to the employees if the tax is ultimately forgiven.
All that said simply, if an employer does not continue to withhold these taxes and they are not forgiven, they will be liable for paying them come next year and would be forced to turn around and try to get the taxes paid on behalf of the employees back from the employees. Obviously, this creates a huge clusterfrick from the employer’s perspective. Therefore, I’m anticipating the logical approach from employers will be the continue collecting the tax (because they still have an obligation to) and just distribute it back to the employees if the tax is ultimately forgiven.
Posted on 9/2/20 at 1:16 pm to andrewm
quote:
It's optional for the company to defer the employee portion of federal withholding. However, the employee would then be responsible for paying all of that back next year. None of my employees wanted that, so we're not changing anything.
I get that but what if it's forgiven. How will you then get that 4 months of money that was paid in that you are due? It isn't income tax so there isn't a mechanism in place thru tax returns to get that money to you.
Posted on 9/2/20 at 1:22 pm to deltaland
Companies actually have to agree to the pause
But even if your company agrees
If you earn more than 125k then your payroll taxes will still be deducted
But even if your company agrees
If you earn more than 125k then your payroll taxes will still be deducted
Posted on 9/2/20 at 1:25 pm to Chromdome35
quote:
Our company isn't doing it until they receive better guidance from the gov/IRS
LOL that's what my employer said...
President Trump’s Executive Order deferring Social Security taxes begins September 1, 2020 and continues through December 31, 2020. At this time, we will continue to withhold Social Security taxes until there is more definitive guidance from the Treasury department.
Items that still need additional guidance include:
Is the employee or employer responsible for repayment of the missed tax amounts?
Will the extra tax payback in 2021 cause employees undue hardship?
How will the amount be withheld from employees that may terminate in 2020?
System configuration and wage base determinations.
Posted on 9/2/20 at 1:41 pm to andrewm
I don't want them deferring mine. Of taxes are deferred and later forgiven, I'll just enjoy the bonus, with the tax refund I usually get.
Posted on 9/2/20 at 1:43 pm to deltaland
Not surprised. Very little turnaround time. Very little guidance.
Posted on 9/2/20 at 1:48 pm to deltaland
I talked to my CPA and he said do not stop withholding. If an employee separates from the company and there is no forgiveness then the company is on the hook for the tax repayment.
Posted on 9/2/20 at 1:53 pm to UAinSOUTHAL
quote:
How will you then get that 4 months of money that was paid in that you are due? It isn't income tax so there isn't a mechanism in place thru tax returns to get that money to you.
If the employer withholds and the tax is forgiven, they will (1) not have paid the tax and it should still be with the employer or (2) they will receive a credit on their next return for an overpayment. Either way, a prudent employer should have the money available to just reimburse the employee.
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