Employers contemplating President Trump’s plan to permit deferred fee of payroll taxes face a collection of prices, uncertainties and complications.
The president desires employers to stop collecting the 6.2% levy that is the employee share of Social Security taxes for a lot of staff, beginning Sept. 1 and going via the top of the 12 months. However his transfer, introduced in a memo Saturday, doesn’t change how a lot tax workers and employers really owe. Solely Congress can do this.
Employers’ largest fear: In the event that they cease withholding taxes with none assure that Congress will really forgive any deferred funds, they might discover themselves on the hook. That may be a specific threat in instances the place workers change jobs and employers can’t withhold extra taxes from later paychecks to atone for missed funds.
“The Inner Income Service will come to that deep pocket” of employers to gather payroll taxes, stated Marianna Dyson, a lawyer at Covington & Burling LLP in Washington who focuses on payroll taxes. “Legal responsibility goes to stay to the employer like flies to flypaper.”