President Trump’s payroll tax holiday is scheduled to start next month, but the government has yet to issue guidance to businesses or payroll processing firms — which means employers may be unlikely to participate.
Pete Isberg, vice president of government relations for payroll processing firm ADP, told FOX Business that he is surprised guidance hasn’t been issued by now.
“It’s unlikely that many employers will be able to make the programming changes by September 1,” Isberg said. “We’ve advised Congress and Treasury that anything like this normally requires at least six months for an orderly programming transition.”
Isberg, who has met with the IRS about the issue, said that changing tax rates in the middle of the year, mid-quarter and applying it to selected employees is no simple feat — and may mean that wages need to be recorded separately during the deferral period.
Meanwhile, Isberg noted there are many details employers still need to know, including whether the measure should be an option for all employees if an employer offers it; how workers should elect to defer or not to defer; and what happens if an employee doesn’t make a selection.