Payroll Tax Holiday

[SmashMouth]

Anyone have any feelings on this? I’m not really on board with it. It’s very ambiguous, and I’m not sure how the mechanics of it would work. Any thoughts, ideas, solutions?

[SmashMouth]

So, either no one knows anything about this to have any feelings, or can’t figure it out or just don’t care. I’m sure there will be the opportunity in this discussion to villainize one party or the other. We can even bring racism or sexism into it. So come on in and relax. Whatcha think?

[CardinalBacker]

It’s fuzzy. It’s a deferral at this point, not an actual holiday. As it stands those funds will still be due at tax time. At least that’s my understanding. 
 

My employer is trying to decide how to move forward. 
1. No money withheld from the employees. 

2. Withhold the money and hold it until we better know what’s happening.

3. just keep withholding and making payments to the gov as normal. 
 

It’s about managing our firm’s (and the employees’ risk). 
I think the principal is an interesting one because it will help self-employed taxpayers the most, and only affects those who are actually working. But overall I think it’s a bad idea to suspend payments into our most poorly situated social safety nets... Ss and Medicare. 

[SmashMouth]

37 minutes ago, CardinalBacker said:

It’s fuzzy. It’s a deferral at this point, not an actual holiday. As it stands those funds will still be due at tax time. At least that’s my understanding. 
 

My employer is trying to decide how to move forward. 
1. No money withheld from the employees. 

2. Withhold the money and hold it until we better know what’s happening.

3. just keep withholding and making payments to the gov as normal. 
 

It’s about managing our firm’s (and the employees’ risk). 
I think the principal is an interesting one because it will help self-employed taxpayers the most, and only affects those who are actually working. But overall I think it’s a bad idea to suspend payments into our most poorly situated social safety nets... Ss and Medicare. 

Just to give perspective, how does it help self-employeds the most? It’s my understanding that only the 6.2% from the employee is subject. Even for self-employeds, the employer match would still have to be submitted. 

[SmashMouth]

They need to issue guidance. Questions I have:

If it’s not forgiven, how can the employer recoup the money to pay it back? What if the employee no longer works for the employer, does the employer just get left holding the bag? Big companies that use payroll software...how long will it take for them to adapt their payroll software to accommodate the order? Can an employer “opt out” of doing it? Does it apply to all wages (including bonuses)? Are there any exclusions other than you can’t make more than $4000 every 2 weeks pre-tax? How does your non-taxable 401(k) deduction affect this? How does this help unemployeds who really need some help (no job, no payroll tax deferment). There’s plenty more, but that’s a start. I don’t think this was well thought out, as I have said. 

[CardinalBacker]

36 minutes ago, SmashMouth said:

Just to give perspective, how does it help self-employeds the most? It’s my understanding that only the 6.2% from the employee is subject. Even for self-employeds, the employer match would still have to be submitted. 

This is the hidden content, please

• Sign In
• or
• Sign Up

My understanding is that it was for the the SS and Medicare portions... the entire 7.65% that is withheld from the employee, as well as the 7.65% match that is contributed by the employer.  The article doesn't spell it out in black and white.

If you are an employee, you would save 7.65 and your employer would save 7.65%.  If you are self-employed, you'd be saving the entire 15.3% self employment contribution that's required of you.  In hard dollars the savings is the same, but it's not split between employer/employee if you're a one man show. That's my understanding, anyways. 

EDIT*

The more I read, the more confused I get.  What I just wrote was probably incorrect. 

This is the hidden content, please

• Sign In
• or
• Sign Up

I think we're all just stumbling around waiting for guidance.

[SmashMouth]

4 minutes ago, CardinalBacker said:

This is the hidden content, please

• Sign In
• or
• Sign Up

My understanding is that it was for the the SS and Medicare portions... the entire 7.65% that is withheld from the employee, as well as the 7.65% match that is contributed by the employer.  The article doesn't spell it out in black and white.

If you are an employee, you would save 7.65 and your employer would save 7.65%.  If you are self-employed, you'd be saving the entire 15.3% self employment contribution that's required of you.  In hard dollars the savings is the same, but it's not split between employer/employee if you're a one man show. That's my understanding, anyways. 

EDIT*

The more I read, the more confused I get.  What I just wrote was probably incorrect. 

This is the hidden content, please

• Sign In
• or
• Sign Up

I think we're all just stumbling around waiting for guidance.

Lmao. Exactly. That’s why I started the flipping subject. 

[WOSdrummer99]

More questions than answers. I see nothing more than empty election promises. You guys seem to know a lot about finances and still can't get a grasp on it.

[CardinalBacker]

5 hours ago, WOSdrummer99 said:

More questions than answers. I see nothing more than empty election promises. You guys seem to know a lot about finances and still can't get a grasp on it.

Exactly.  It was kinda like “here’s the plan... I order the Treasury to work it all out” or something like that. 

[SmashMouth]

5 hours ago, WOSdrummer99 said:

More questions than answers. I see nothing more than empty election promises. You guys seem to know a lot about finances and still can't get a grasp on it.

You said it. Poorly thought out plan. Hopefully guidance will be given soon, so employers will know how to proceed, and citizens will know what to expect.