Coalition of Business Trade Groups Call Payroll Tax Deferral Unworkable

Chris Gaetano
Published Date:
Aug 19, 2020
A coalition of 33 business trade groups said that the White House's planned deferral on collecting payroll taxes will create such a substantial tax liability at the end that most businesses will just ignore the order altogether, reported the Hill. The groups, which include the U.S. Chamber of Commerce, expressed their views in a letter to congressional leaders as well as Treasury Secretary Steven Mnuchin. They noted that, once the government starts collecting the tax again, the bill for employees could range between $751.15 and $2,232, a large sum compared to the brief boost to paychecks.

"If this were a suspension of the payroll tax so that employees were not forced to pay it back later, implementation would be less challenging. But under a simple deferral, employees would be stuck with a large tax bill in 2021. Many of our members consider it unfair to employees to make a decision that would force a big tax bill on them next year," said the letter.

The groups also noted that implementing a system whereby the individual employee can make this decision is unworkable, meaning that "many of our members will likely decline to implement deferral, choosing instead to continue to withhold and remit to the government the payroll taxes required by law."

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