That Payroll Tax Cut Will Have to Be Paid Back to Government
Some Central New Yorkers might be seeing more money in their paychecks thanks to a payroll tax break, but don't get too excited: that money will have to be paid back.
The "payroll tax holiday" comes from an executive action signed by the President. The tax holiday applies to workers making less than 100-thousand dollars a year and went into effect last Tuesday, September 1.
If your employer is participating, it gives you a break from paying your share of the 6.2 percent tax that goes into Social Security. In the short term, you'll see a more cash in your pocket, but it only lasts until the end of the year, and then you'll have to pay it back, reports WIVB.
In the beginning of 2021, it's likely that social security withholding will double, to pay back what wasn't paid in 2020. Your best bet is to opt out of the "holiday" if your employers allows it, and if not, put the extra money aside to cover the increased hit to your paycheck come 2021.
The payroll tax holiday differs from the stimulus payments millions of Americans received earlier this year. Those payments will not have to be paid back.