Change with Payroll due to COVID19

Last MARCH 11, 2020 Trump Administration Seeks Payroll Tax Cut in Response to COVID-19 Outbreak. 

• President Donald Trump is asking Congress to pass a payroll tax cut to help stimulate the economy amid the coronavirus (COVID-19) economic slowdown. A payroll tax cut reduces the amount of money withheld from employees' paycheck and results in an increase in take-home pay.

 

• Congress has passed payroll tax cuts – most recently in 2011 and 2012 – in an attempt to stimulate the economy during a downturn.

 

• Payroll tax cuts are costly and finding a way to compensate Social Security Trust Funds for the loss of revenue can be a difficult political process. Past payroll tax cuts have been paid for by fees attached to mortgages or from increased federal borrowing.

Source: Holland & Knight
https://www.hklaw.com/

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WHAT IS PAY TAX CUT? 

Payroll tax cuts is sometimes referred to as "payroll tax holidays".   It is an incentive of the government to offer tax reduction or tax elimination program on taxable income and profits.   

Tax holidays are often used by local governments to reduce sales taxes. The last time PAY TAX CUT was given by the government was during President Barack Obama, 2011 and 2012. During this time Social Security Trust Fund under the employee (and self-employed) shares of the payroll tax that would have gone to was reduced from 6.2 percent to 4.2 percent.

​In the event Congress would act on President Trump's call for Congress to provide "immediate payroll tax relief" as administrations response to the econamic effect of coronavirus (COVID-19) outbreak to income wage earner and small business, tax adjustments would take effect and our team is ready to help you make the most out of it.