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State won’t defer payroll taxes

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Illinois

* Memo…

To: All Agency Directors

From: Dan Hynes, Deputy Governor, Budget & Economy

Subject: Payroll Tax Deferral

Date: September 14, 2020

As you may be aware, the President issued a memorandum in August deferring payroll taxes for certain employees for the period September 1 through December 31, 2020. The President’s action was a deferral, rather than a tax cut, absent an act of Congress making it permanent.

Recent guidance issued by the U.S. Treasury Department and the IRS indicates those deferred taxes would need to be repaid by both the wage earner and the employer beginning January 1 through April 30, 2021, or begin to accrue interest and penalties. Such a repayment could pose a tremendous hardship on state workers.

Be advised that the state of Illinois, for agencies under the Governor, will not be implementing this optional payroll tax deferral. Agencies should continue to process payrolls, including the deduction of payroll taxes, as they normally would.

Thank you for your continued service and dedication to the people of Illinois during these challenging times.

posted by Rich Miller
Monday, Sep 14, 20 @ 5:02 pm

Comments

My school district also decided not to defer payroll taxes for all of its employees.

Comment by Wensicia Monday, Sep 14, 20 @ 5:12 pm
Just imagine how different we’d be right now if Rauner were here.

Oy.

Comment by Mr K Monday, Sep 14, 20 @ 5:19 pm
Of course the Trump administration is requiring this for federal workers.

Comment by Norseman Monday, Sep 14, 20 @ 5:20 pm
My muni employer will not defer them, much to my delight. Already got slammed by the SALT deduction limitation two years ago, don’t need another uncertainty come April 2021.

Comment by Proud Sucker Monday, Sep 14, 20 @ 5:24 pm
Smart move by the State. And no harm done. If the Feds eventually decide to forgive it like they have hinted, you can claim the money on your tax return.

Comment by RNUG Monday, Sep 14, 20 @ 6:51 pm
Trump, if he wins, has no intention of forgiving the deferral. Once he wins, he won’t follow thru on anything that his base thinks they are re-electing him for. He will have no reason to.

Biden, if he wins, isn’t going to forgive that deferral because the social security fund is already in trouble.

Comment by thoughts matter Monday, Sep 14, 20 @ 9:44 pm
This “deferral” was a bad idea from the word go.

Comment by JS Mill Tuesday, Sep 15, 20 @ 8:19 am
“Trump, if he wins, has no intention of forgiving the deferral.”

I disagree. If he is re-elected he will want to reward his base. POTUS does not want to anger them by having them pay deferrals back. And I doubt he cares about the long-term solvency of Social Security or the nation in general. This deferral, permanent cut, however it ends up, is lamebrained pandering at its worst.

Comment by Independent Tuesday, Sep 15, 20 @ 8:38 am
Good. It was a silly idea.

Comment by bhartbanjo Tuesday, Sep 15, 20 @ 8:41 am
== I disagree. If he is re-elected he will want to reward his base. POTUS does not want to anger them by having them pay deferrals back.==

Please elaborate. If re-elected, he will be a lame duck President. He won’t be running for elected office again. Why would he care about rewarding or angering his base at that point?

Comment by thoughts matter Tuesday, Sep 15, 20 @ 8:52 am
“Why would he care about rewarding or angering his base at that point?”

He lives for his pep rallies and if re-elected those will continue. If he ticks off his base he risks losing that adoration he craves so desperately. Plus what does he care if he endangers Social Security’s solvency? Not his money, so no skin off his back.

Comment by Independent Tuesday, Sep 15, 20 @ 8:58 am
If I’m to take a page from OW’s playbook…

To _thoughts matter_ & _Independent_, Prez Trump can’t make the cuts because it takes a vote of Congress before he can sign it. Unless there’s sufficient swing in representation, I just don’t see the votes totaling up.

To the post, good on Illinois for not biting on this and recognizing the harm it could cause not only for employees but for the State budget.

Comment by From DaZoo Tuesday, Sep 15, 20 @ 9:21 am