September kicks off the payroll tax deferral period initiated by President Trump last month, but few businesses are expected to participate in a plan that would likely lead to less take-home pay for workers early next year.
Under guidance issued by the IRS last week, employers can stop withholding Social Security payroll taxes from paychecks from Sept. 1 through Dec. 31 for employees who make less than $4,000 on a biweekly basis. The money would then be collected by having businesses increase the amount of taxes withheld from paychecks in the first four months of 2021.
“This is like other tax deferrals that we gave which were very helpful to people,” Treasury Secretary Steven Mnuchin said during a hearing Tuesday held by the House Select Subcommittee on the Coronavirus Crisis. “This is money in people’s pocket that they need now that is very important and very meaningful.” Continue reading.