Payroll Tax Break: What you need to know
HUNTINGTON, W.Va. (WSAZ) – On Saturday, President Donald Trump signed several executive orders after stimulus negotiations stalled.
One of those is an executive order that, through a tax holiday, defers the roughly 6 percent tax that is collected every time a person gets paid.
The goal of the order is to put cash into the hands of working Americans, but it isn’t free money.
Economists say this is not a tax break, but rather a tax delay. That means instead of gradually paying the money through each paycheck, the money would all be paid back to the government at the beginning of next year.
Trump says the tax holiday would apply to workers who make less than $100,000 a year. Analysts say the delay could add up to thousands of dollars you will have to pay back.
Economic analysts also say this is more beneficial to those who are currently employed, not those who are left without a job during the pandemic. They say the best thing to do with that extra money is to save it if you don’t need it because you will have to eventually pay it back.
How the repayment will happen is not clear at this time. We will keep you posted as more details are released.
Copyright 2020 WSAZ. All rights reserved.