The Superior School District is taking a pass on a presidential deferral of payroll taxes through the end of the year.
In an Aug. 8 memorandum, President Donald Trump directed the secretary of the treasury to defer certain payroll tax obligations for Americans workers most in need — anyone earning less than $4,000 on a biweekly basis — as a form of relief in response to the pandemic. The deferral period runs from Sept. 1 to Dec. 31.
The measure would allow employers to forgo withholding the employee’s share of Social Security taxes.
The district has decided not to participate, said School Board President Len Albrecht. The Wisconsin Association of School Boards, in consultation with tax attorneys, is recommending against the implementing the deferral for the following reasons:
- Many employers haven’t had the time to implement software changes to payroll systems to handle the changes in withholdings.
- There are no guarantees the deferred amounts will be forgiven by an act of Congress.
- The Internal Revenue Service requires employers to collect the deferred amounts in the future.
- Employers may be liable to the IRS for deferred amounts not repaid by the employee.
Guidance issued by the IRS states the repayment period runs Jan. 1 to April 30, and interest, penalties and additions to any deferred taxes still owed begin to accrue on May 1, 2021.