Fact check: Payroll taxes cut by executive action must be paid back

Ella Lee

The claim: No more payroll taxes will be taken out of paychecks until 2021

Your paycheck might look bigger lately. But the extra money won't be yours for long, despite what some posts on social media might lead you to think.

“So starting next week no more taxes taken out our payroll check until 2021,” a Sept. 1 Facebook post reads, a number of emoji scattered between the text.

The post is referring to the IRS payroll tax deferral, the product of one of four executive actions signed by President Donald Trump. The action kicked in Sept. 1.

Many Facebook users that commented accused the author of leaving crucial details out the post, which has been shared 54,000 times.

“More people think they’re about to get a free ride,” one commenter wrote. “This will have to be paid back. Just another way to screw us. NOT help us!”

“Come on people. This is not good,” another lamented.

The user who made the Facebook post did not respond to USA TODAY’s request for comment and clarification.

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Payroll taxes will be deferred – but only for a few months

It’s true that payroll taxes will be deferred through the end of the year, but the post leaves out crucial context regarding when it must be paid back.

The president signed a presidential memorandum on Aug. 8 that declared all payroll tax obligations would be deferred through the end of 2020. The action is intended to provide relief for taxpayers amid the COVID-19 pandemic.

“This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money is needed most,” the action reads.

The payroll tax is 6.2%, according to the IRS. The order will temporarily cut those taxes for workers who earn less than $4,000 biweekly, or less than $100,000 annually.

What the order doesn’t say explicitly, though, is that those taxes must be made up by April 30, 2021 – just four months after the deferral ends, an IRS notice explains.

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The order does say that Secretary of Treasury Steve Mnuchin is instructed to “explore avenues, including legislation” to stop those taxes from being paid, but Trump has indicated any forgiveness of the temporary loan might be contingent on his reelection.

“If I’m victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax," Trump said, per the Washington Post. “I’m going to make them all permanent.”

"In other words, I'll extend it beyond the end of the year, and terminate the tax," he added.

But, the Washington Post also explained, "Major changes to the tax code fall entirely to Congress, so Trump alone cannot waive Americans’ tax debts or enact permanent changes to tax law."

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Our ruling: Missing Context

This claim is MISSING CONTEXT. It’s true that payroll taxes won’t be taken out of some taxpayers’ paychecks, beginning Sept. 1 and continuing through the end of the year. But once the deferral ends, those taxpayers will be required to pay back the taxes by April 30, 2021.

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