Share
Preview
President Trump signed an executive order that includes allowing a temporary payroll tax deferral for employees and employers.
Hey all,

A friendly F.Y.I…

President Trump signed an executive order that includes allowing a temporary payroll tax deferral for employees and employers.  As opposed to the deferral of the employer portion of Social Security tax as put into place by the CARES Act, this deferral now applies to employees’ and employers’ Social Security tax.  The U.S. Department of Treasury has yet to release final instruction on how this can be done.  But unless there are substantial changes you need to be very careful about considering this as an option.

The executive order states that "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 concerning other pay periods" can defer the taxes.  So anyone who makes over $100,000 annualized cannot do this.

The goal with this is to give money back to American workers.  However, as it stands right now, this is simply a short-term loan for the employer and the employee.  What if an employee leaves the company?  What will happen come January 2021 or the 2021 tax season when all of this would be due?  This could set up companies and their employees for a cash-flow disaster in 2021.

We have a TON of questions/concerns about what this means to our clients and will be paying very close attention as details emerge in the coming weeks.

For the full memorandum, click here.

The executive order also includes an extension of federal unemployment payments for up to now $400 a week as well as the deferral of federal student loan payments and continuation of the freeze on some evictions.

If you have any questions, just let us know!

Thanks again,

Tim
 
 
 

Tim Petrey, CPA, CGMA
Managing Partner
HD Davis CPAs,LLC
330.759.8522 ext. 103









Email marketing powered by Business Marketing Engine and Copywriter Today.