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Started By
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re: GEOTUS Payroll Tax Holiday?
Posted on 8/11/20 at 12:09 pm to LSUFanHouston
Posted on 8/11/20 at 12:09 pm to LSUFanHouston
quote:
Smart employers will keep that money aside in an interest bearing account,
Which means they are still collecting it from the employee,
I was meaning the employer-paid portion, as subject to their own deferrals, per CARES.
1
Posted on 8/11/20 at 12:12 pm to LSU316
quote:
In my mind the bottom line is in today's world....no business is going to put themselves at risk by stopping the employee deduction for payroll tax or using their budgeted money for the employer portion on anything else.....the businesses are still going to take that money from your check and hold it until that deferred tax comes calling for payment....now if it is later forgiven then they might pay out the employee portion to employees.
Agreed 100 percent. No way can I recommend to my business clients to not withhold. Way too risky.
Posted on 8/11/20 at 12:15 pm to LSU316
quote:
I don't believe the EO does anything to force the employee to stop deductions.
It's not clear.
quote:
The Secretary of the Treasury is hereby directed to use his authority pursuant to 26 U.S.C. 7508A to defer the withholding, deposit, and payment of the tax imposed by 26 U.S.C. 3101(a), and so much of the tax imposed by 26 U.S.C. 3201 as is attributable to the rate in effect under 26 U.S.C. 3101(a), on wages or compensation, as applicable, paid during the period of September 1, 2020, through December 31, 2020, subject to the following conditions:
I'm not clear if this is a mandatory deferrment of withholding or an optional one. I'm taking the position that it's optional, for now.
I also know a lot of my business clients are going to have some very upset workers who say "Trump told me I was gonna get my money" so that will be fun to deal with as well.
Posted on 8/11/20 at 12:15 pm to VoxDawg
quote:
I was meaning the employer-paid portion, as subject to their own deferrals, per CARES.
Gotcha, you said the "entire amount is deferred" so I thought you were referring to both employer and employee side.
Posted on 8/11/20 at 12:18 pm to LSUFanHouston
Just to be clear, this is only for people making less than $100k and not one your first $100k, right?
Posted on 8/11/20 at 12:20 pm to LSUFanHouston
quote:
you said the "entire amount is deferred" so I thought you were referring to both employer and employee side.
Yes, but as a tag-team effort via the employer half via CARES, and the employee contributions per the new EO. I should've been more clear.
Posted on 8/11/20 at 12:21 pm to VoxDawg
At the end of the day, worrying about getting nudged into a higher tax bracket as a result of deferral/forgiveness of this withholding of the EO-specified taxes is like having a glass full of ice and being concerned that it'll overflow onto the table as the ice melts.
Posted on 8/11/20 at 12:26 pm to Janky
quote:
Just to be clear, this is only for people making less than $100k and not one your first $100k, right?
Yes, my understanding is this is a cliff.
$99,999 - qualify
$100,001 - do not qualify
Posted on 8/11/20 at 12:29 pm to PhilemonThomas
There are no companies that are going to give an employee a bonus if they forgive a tax paid by an employer.
They may use that to hire someone sooner, but current employees are not going to get a raise/bonus with the way companies have been potentially affected.
They may use that to hire someone sooner, but current employees are not going to get a raise/bonus with the way companies have been potentially affected.
Posted on 8/11/20 at 12:33 pm to LSUFanHouston
quote:
Yes, my understanding is this is a cliff.
$99,999 - qualify
$100,001 - do not qualify
Well... kinda. It's based on your base salary as paid bi-weekly, or otherwise on a regular basis. If you get paid commissions, like I do, that doesn't figure into the equation, even though the commissions push your base salary over the threshold.
Posted on 8/11/20 at 12:33 pm to LSUFanHouston
quote:
Yes, my understanding is this is a cliff.
$99,999 - qualify
$100,001 - do not qualify
Naturally, I get fricked again.
Posted on 8/11/20 at 1:00 pm to LSUFanHouston
(no message)
This post was edited on 8/11/20 at 1:12 pm
Posted on 8/11/20 at 1:00 pm to ProjectP2294
quote:
I guess they're saying you could inadvertently bump up to the next marginal tax bracket because you're not paying the payroll tax anymore.
I don't know if that's true or not. I would imagine someone familiar with the interplay of those taxes could chime in.
No. Income tax is based on gross income less some pre-tax deductions (the largest one being a 401k deduction to a non-Roth account, but also including flexible spending account contributions and premiums for health insurance -- though only for working folks, retirees can't contribute to FSA's and their health insurance premiums are post-tax).
It wouldn't matter if the payroll tax was permanently at zero or at near 100% -- taxable income stays the same.
Posted on 8/11/20 at 1:01 pm to cave canem
quote:
I am pretty sure SS and Medicare is not taxed
They are not pre-tax deductions which would reduce taxable income. Your 401k contribution (if to a non-Roth account) is pre-tax so it would.
Posted on 8/11/20 at 1:03 pm to LSU316
quote:How in the wide world of frick would this be legal? For them to not pay back to employees funds that were collected and not paid in the form of taxes? They most assuredly would owe those funds back to the employee.
now if it is later forgiven then they might pay out the employee portion to employees.
Posted on 8/11/20 at 1:06 pm to LSUFanHouston
quote:How is not withholding the employee portion risky? The risk lies with the employee, not the employer at that point, right?
Way too risky.
Posted on 8/11/20 at 1:11 pm to Epic Cajun
What happens if an employer stops withhold SS and Medicare, and then in 3 months, a court finds that this EO is illegal and therefore null and void. Do employees have to all of a sudden come up with the money?
Posted on 8/11/20 at 1:13 pm to SSpaniel
quote:I would assume so? Maybe I'm wrong though. It's something that you owe as an employee. If it's not collected, and then at a later date ruled that it needs to be collected, you are on the hook for that.
What happens if an employer stops withhold SS and Medicare, and then in 3 months, a court finds that this EO is illegal and therefore null and void. Do employees have to all of a sudden come up with the money?
ETA: Maybe that's giving the average person too much credit in the "personal responsibility" area though.
This post was edited on 8/11/20 at 1:15 pm
Posted on 8/11/20 at 1:16 pm to LSU316
quote:
now if it is later forgiven then they might pay out the employee portion to employees.
It's generally frowned upon to take in "taxes" and then just not give them back or to the government.
Posted on 8/11/20 at 1:24 pm to LSUFanHouston
Part A directly below the part quoted here states:
How does this and the part that you quoted seem to be optional? Also the salary "requirement" is 104k, not 100k.
quote:
(a) The deferral shall be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods.
How does this and the part that you quoted seem to be optional? Also the salary "requirement" is 104k, not 100k.
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