Additional Guidance on Trump’s Payroll Tax Deferral Program
The IRS has released some bad news for anyone who is deferring payroll taxes under President Trump’s executive order…
A few weeks ago we detailed the available facts of Trump’s payroll tax executive order. We now have guidance from the IRS and are a few days into the program. If you have decided to opt into deferring payroll taxes for your company, we have some information for you!
The Good News and Bad News
According to the guidance by the IRS, payroll taxes that have been deferred for the remainder of the year will need to be paid back by April 30th, 2021 to avoid interest, penalties, and additions to tax that will begin to accrue immediately on May 1st.
While qualified employees will be receiving a larger check, for now, checks will be smaller than before during the payback period between January 1st – April 30th, 2021. The good news is employees will not have to be responsible for any unpaid taxes if unforeseen circumstances were to arise. The bad news is that all unpaid deferred tax will fall on the employer to recoup. It is still unsure if Trump will forgive the unpaid taxes in the future. Until then, make sure you and your company are in a good position to pay back all tax that has been deferred and have a plan for situations that may jeopardize that.
Feel free to reach out to our team here at Tax Credit Hero if you have any questions on how this impacts the Payroll Tax Credit. We can help you evaluate the best course of action in claiming and utilizing this credit.