Bipartisan group of lawmakers: Feds are ‘pawns’ in tax deferral plan
- By Sherkiya Wedgeworth
- Sep 08, 2020
While some federal employees may be looking forward to larger paychecks in coming weeks, others are not, and more than 20 senators are asking that the mandatory payroll tax deferral be optional.
“We urge you to let federal workers and uniformed service members choose whether to defer their payroll tax obligations under IRS Notice 2020-65, rather than forcing them to participate,” the group of more than two dozen lawmakers wrote in a letter to Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Russell Vought.
The order—which will go into effect with federal employees’ second September paycheck—also requires the deferred taxes to be repaid starting in January. Most businesses have declined to implement the plan.
“Federal workers and service members should not be used as pawns for a payroll tax scheme that many private sector employers are unlikely to join and where key questions remain unanswered,” the letter continued.
Among their concerns is who would be liable for the unpaid payroll taxes in the event an employee separates from their agency before they are to be repaid; how will agencies communicate important information regarding the reduction in take-home pay in 2021; and they are also requesting cost estimates for the plan.
The deferral begins on or around September 18. Lawmakers are asking for an immediate response to their request and questions.