Does your paycheck look a little higher than normal? If so, it could be a tax time bomb.
A payroll tax deferral beginning September 1 was recently signed via a presidential executive order. This deferral of the employee's portion of Social Security will raise your paycheck temporarily until January, 2021. Beginning in 2021, the deferred Social Security will then need to be paid.
This year’s tax deferral is NOT currently a tax holiday. So even if your employer removes your Social Security tax from your paycheck, there is a real possibility you will need to pay it back between January and April, 2021. That could mean a pretty large tax bill for you in early 2021!
What you need to know
If you notice that the amounts are different, or that no Social Security taxes are withheld from your September paycheck, then that’s a signal you may have a tax repayment bill in early 2021.
If you have any questions about how this payroll tax holiday affects you, please call.
Last updated: 10/08/2020
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