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Americans have been waiting months for Congress to approve a second coronavirus stimulus check, but the chances of that happening are slim as Republicans recently proposed a “skinny” relief bill without another check (a proposal that was blocked in the Senate). President Trump took action on his own recently amid the stalled negotiations by signing an executive order allowing employers to defer the collection of payroll taxes between Sept. 1 and Dec. 31, 2020, for employees earning under $104,000 annually.
Employees normally pay a 6.2% payroll tax on earnings up to $137,700 in 2020 to fund Social Security. Thanks to the president’s executive order, those whose employers decline to collect the tax over the next few months will see their paychecks get a little bigger. But a payroll tax deferral is not the same as a payroll tax cut. And while Trump has pledged that the unpaid taxes could ultimately be forgiven if he’s reelected, it’s not clear if Congress would agree (especially since Democrats are likely to retain control of the House of Representatives) or if he could find other authority to make that happen.
Since there’s a good chance payroll tax forgiveness won’t happen, it’s important to realize the bill could come due (and sooner …
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