President Trump recently asked employers to participate in a payroll tax deferral program until the end of 2020 – claiming it’ll help jumpstart an economy struggling with COVID-19.
Although this would temporarily increase workers’ take home pay, most are left wondering: is this a gift during hard times, or a VERY questionable loan?
The measure asks employers to stop withholding the 6.2% Social Security tax from most workers’ paychecks until 2021.
Many employers say they won’t do it because of how disruptive implementation would be, but federal workers and military personnel learned as of Sept 1 their participation is MANDATORY!
Federal bulletins urged workers to prepare themselves through savings and budgeting. That’s because come 2021, that tax will have to be paid back!
Actually saving the extra money will be extremely difficult, though. “For those who fail to plan ahead,” says Forbes columnist Shahar Ziv, “the payroll tax deferral could turn into a financial planning nightmare...”
Reporters at the Washington Post agree. “The payroll deferral is all about the optics of appearing to provide meaningful pandemic-related financial assistance,” but it just extends the current crisis further into 2021.
Federal employees deserve to have a choice if their livelihood is going to be up for experimentation! This DOESN’T help – it just makes financial planning that much harder during a global crisis!