Local expert explains Payroll Tax Holiday

Local expert explains Payroll Tax Holiday

WICHITA FALLS, Texas (TNN) - Workers across the country could see an increase in their paychecks from September until December.

President Trump signed an executive order approving the payroll tax deferral for Americans making less than $104,000 but more money now means less money in January.

Larry Anderson works for a contractor in Wichita Falls.

He does not know if his employer will opt into the payroll tax deferral but says right now he doesn’t need it.

“If I were given a personal option I would opt-out,” said Anderson. “We are fortunate enough not to need the extra money.”

The program is also known as the payroll tax holiday.

Under the program, 6.2 % of your social security tax will not be taken out of your paycheck.

While the concept looks like a good idea right now, Genevieve Anderson with Volunteer Income Tax Assistance says it’s not all good news.

“if employers opted for this in September, the employees will see the repayment from January to April. “They are now going to be holding out for January 6.2% as well as the 6.2% from September.”

For example, if you make $1,200 dollars a paycheck you will see an increase of $74.40.

Then from January to April, you will be paying double the amount of social security meaning $148.80 every paycheck.

“If I were in a tight spot right now I would probably welcome the money as long as I knew that they were going to welcome that money back later on down the road then I could plan for it,” said Larry Anderson.

“If you’re living on a very structured budget right now, it’s great that you’re getting some wiggle room,” said Genevieve Anderson. “What to remember is, once January comes around you are going to be hurting.

At this time, the deferral program will not impact 2020 income tax filings.

Those wondering if they will be impacted are encouraged to contact their employer.

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