Tax Deferral E.O. Causes Problems for Lower-Paid Employees
The Executive Order on “tax relief” directs the Treasury Department to defer withholding of payroll taxes from the paychecks of federal workers who earn less than $ 4000 in gross pay bi-weekly until the end of this year. Employees cannot keep this “extra” take-home pay; all the taxes must be re-paid to the IRS before April 30, 2021, or else the employees could incur penalties and interest on their involuntary debt. Employees who are fortunate enough to earn higher annual salaries ($ 104,000 gross) will not see any change in their withholding.
NTEU has been opposing this action from the beginning. On September 2, Tony Reardon, NTEU National President, sent a letter to OMB with several questions about how this will affect employees. NTEU Letter
Members of both houses of Congress have written letters to OMB regarding this initiative.
In the absence of any guidance from the Treasury, OMB, OPM, or Agency management, NTEU has released some preliminary advice for employees about how they can prepare for the tax debt they will incur next year. Click here for the details: Memo
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