Payroll Tax Deferral Program
In late August, President Trump issued an Executive Order for a payroll tax deferral program which allows an employee to defer having social security taxes (6.2%) withheld from their paycheck from September 1, 2020 through December 31, 2020. This deferred amount must be paid back between January 1, 2021 - April 30, 2021 which would require employers to withhold double the amount of social security taxes (13.4%). Employers have the option of participating in this program. The District determined that it would not participate in the program for several reasons:
• This is a deferral of taxes, not a forgiveness of taxes and the additional amount that
must be withheld during the payback period could create additional hardships for some
employees.
• The program creates additional financial risk for the District if an employee resigns,
retires, or terminates during the payback period.
• It requires modifications to the District’s payroll system and creates additional tracking
and reporting requirements for year-end tax forms which may cause confusion.
