How much will I save due to the Trumps executive income tax holiday

[rjs]

What do you mean by "executive income tax holiday"? Are you talking about the deferral of payroll taxes? If that actually gets implemented you won't save anything. He's not eliminating the taxes, just deferring them to next year instead of this year. You'll pay the tax in 2021 instead of in 2020.

[Opus 17]

If implemented, your employer would stop collecting Social Security and Medicare tax, so whatever you currently see as those tax amounts on your paycheck will go away.  Since the executive order is only a deferral, or delayed collection, you would still owe those taxes when you file your tax return.

I think that the president is betting that if Republicans win the fall election, they will make the tax cuts permanent, and if the Democrats win the election they won’t want to start their time in power with something that will be seen as a big tax increase, and will also make the deferral permanent.  Since the deferral does not take affect until September 1, the president could also rescind it if congressional leaders agree to a different stimulus proposal.

[VolvoGirl]

The Social Security & Medicare tax deduction is 7.65% of you pay.  So you would save that.

[rjs · Accepted solution]

The presidential memorandum deferring the payroll tax applies only to Social Security tax (6.2%), not to Medicare tax. Also, it applies only to employees whose gross pay is less than $2,000 per week.

[Anonymous]

nothing.  what he did with the EO was to defer the collection of the social security tax for 2020 to 2021. so you get to pay back whatever the cut is.  the next question is whether the EO is legal under the law.  we'll have to see what the IRS says. 

[Bees]

Wow,  I did not know that the intent is to claw it back next year. What a disaster that is going to be for those who are depending on tax refunds. 

[Anonymous]

if it does go into effect it will be a disaster for Social Security.    Some people will not have the ability to repay.  Other people will die and their estates will not have the money. I'm not even sure there's a provision in EO as to what's to be done if a taxpayer dies even assuming their estate has the ability to repay.