Treasury: Payroll Tax Deferral Won’t Impact Social Security Trust Funds
- Despite Democrats’ claims to the contrary, the Treasury Department just released a statement making clear that President Trump’s deferral of payroll taxes will have no impact whatsoever on current or future payments received by Social Security recipients.
- President Trump and congressional Republicans remain fully committed to the integrity of the Social Security Trust Funds.
- Democrats should join Republican Leader Kevin Brady’s legislation, the Support for Workers, Families, and Social Security Act, and turn this deferment into a payroll tax holiday, which they previously supported under President Obama.
- President Trump deferred the withholding, deposit, and payment of certain payroll taxes for employees who are paid less than $4,000 on a bi-weekly basis. The payroll taxes eligible for deferral are those imposed on wages paid between September 1, 2020 and December 31, 2020. Under guidance issued by the Treasury Department and the Internal Revenue Service, any deferred payroll taxes must be repaid no later than April 30, 2021.
- “The deferral will have no impact whatsoever on current or future payments received by Social Security recipients, and the Trump Administration remains fully committed to the integrity of the Social Security Trust Funds.”
- Treasury makes regular transfers to the Social Security Trust Funds based on an annual schedule developed by Treasury and the Social Security Administration earlier this year.
- Treasury does not expect deferral to impact the Social Security Trust Funds because the deferral is temporary and all deferred taxes must be repaid.
- Repayment of the deferred taxes must start no later than January 1, 2021, and all deferred taxes must be fully repaid by April 30, 2021.
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