The White House published the Presidential Memorandum on deferring payroll tax obligations Aug. 8, which Jefferson Commissioners moved to exempt out of Sept. 8.
“We wish we had a lot more guidance from the federal government,” Deputy Prosecuting Attorney Weston Davis told commissioners. “It seems to me that is may have short-term benefits for some employees, but long term detriments for other employees.”
The memorandum states that while the Department of the Treasury has made efforts to alleviate hardships, further relief is necessary.
“To that end, today I am directing the Secretary of the Treasury to use his authority to defer certain payroll tax obligations with respect to the American workers most in need,” the memorandum states.
The deferment will be for compensation paid from Sept. 1, 2020 through Dec. 31, 2020 for those that earn less than $4,000 in a bi-weekly period pre-tax with no interest on the deferred amount.
The memorandum also states that the Secretary of the Treasury will look at implementing legislation to eliminate the obligation to pay the taxes.
In the additional direction given by the Secretary, affected taxpayers must “withhold and pay the total Applicable Taxes” deferred between Jan. 1, 2021 and April 30, 2021. If the deferred taxes are not paid, “interest, penalties, and additions to tax will begin to accrue on May 1, 2021...”
Commissioner Scott Hancock compared the deferment to kicking a can down the street that one will just get to later and still have to address.
Hancock also stated that county employees have not lost wages during the COVID-19 pandemic, as no employees were laid off as a result of closures.
According to the Defense Finance and Accounting Service (DFAS), a payment service for the U.S. Department of Defense, military members and civilian employees are required to partake in the tax holiday and cannot exempt from the program if their pay qualifies under the guidelines.
Sergeant Major of the Army Michael Grinston tweeted Sept. 8 that soldiers should set the “extra” money aside, as they would still be required to pay the deferred taxes back later.
The Frequently Asked Questions page for Military Members from DFAS states that if a member separates for retires before the tax is collected, they are still responsible for the tax repayment.
“That looked like a no-win deal,” Commissioner Shayne Young said. “I think it’s supposed to help employees that maybe missed out on work but no [county employees] missed out on wages. Maybe it sounds good on paper but it wouldn’t do our employees any good.”