NASHVILLE, Tenn. (WTVF) — Millions of Americans could qualify to get a little extra money in their next paycheck, but it comes with a potential catch.
Through an executive order issued by President Donald Trump, the federal government will allow employees that make less than $4,000 per paycheck to defer paying the social security portion of payroll taxes from now until the end of the year.
That could mean fatter paychecks for Americans that qualify, but CPA Melinda Drennan says, beware.
"As an employer myself, I would not recommend it just because not knowing when you’re going to have to pay it back," said Drennan.
Melinda says the way the President's order is structured, employees will have to pay back what they owe, either through higher payroll taxes next year or in one lump sum.
The only way around paying back those taxes would be through Congressional action.
"Congress is the one that has to decide whether they’re going to waive these taxes altogether or forgive them," she said.
But Congress waiving the taxes all together could also have consequences.
"This is social security so what we do now is going to affect people down the road too with not having as many funds in the system when they retire," explained Drennan.
Some major companies have already made the decision to opt out of the deferral, deciding as a company not to participate.
For companies that do, Drennan says each employee can also ask to opt out. That would be her recommendation.
"It's not something I would recommend to my employees or my clients," she said. "The old saying is - nothing comes free."
What is the rebound?
As Middle Tennessee works to rebound from the impact of the Coronavirus, we want to help. Whether it's getting back to work, making ends meet during this uncertain time, or managing the pressure, we're committed to finding solution. In addition, we want to tell your stories of hope, inspiration, and creativity as Middle Tennessee starts to rebound.
Find more in the sections below
More Safely Back to School storiesHow schools are changing, and what you can do to help your child get the most from their education, in-person or virtual
Getting Back To WorkLearn about the latest job openings, how to file for benefits and succeed in the job market.
Making Ends MeetFind help on topics from rent to food to new belt-tightening techniques.
Managing the PressureFeeling isolated or frustrated? Learn ways to connect with people virtually, get counseling or manage your stress.
Doing What’s RightKeep track of the way people are spending your tax dollars and treating your community.
State of EducationFind ways to cope with the new normal around schools and celebrate students’ success in the age of Coronavirus.
We're Open Y'allSupport local businesses doing their best to stay open and serve their customers during Covid.