House rejects Trump’s payroll tax deferral for its staff

Register now

The U.S. House of Representatives won’t implement President Donald Trump’s order allowing employers to defer payroll taxes owed by workers, joining major companies in rejecting the option.

The House “determined that implementing the deferral would not be in the best interests of the House or our employees,” Philip G. Kiko, the chamber’s chief administrative officer, said in an email to employees. “As a result, we will not implement the payroll tax deferral.”

Trump has been pushing employers to implement a directive that allows employers to forgo withholding payroll taxes due from Sept. 1 through the end of the year. Workers would need to pay back those levies next year unless Congress votes to forgive the bills. That could mean sharply higher withholding in early 2020.

Few employers outside the federal government and the military have taken up the option, hobbling the intended effort to boost incomes and spending. Costco Wholesale Corp., United Parcel Service Inc. and FedEx Corp. are among employers that have said they aren’t participating.

The Senate, where Republicans hold the majority, has yet to make a decision as to whether to defer taxes for its employees. The House is under Democratic control.

The Senate’s nonpartisan payroll office sent a notice early Friday afternoon saying it was “consulting with other legislative branch agencies and Senate stakeholders,” as well as its payroll software provider, over what course of action to take.

The deferral applies to those making less than $4,000 every two weeks, which amounts to about $104,000 a year. House lawmakers wouldn’t qualify because they earn at least $174,000 annually.

— With assistance from Colin Wilhelm

Erik Wasson and Laura Davison
Bloomberg News
Payroll taxes Trump tax plan Donald Trump Payroll Politics
MORE FROM ACCOUNTING TODAY