Legislation Would Make Payroll Tax Deferral Optional

NTEU endorsed legislation that would allow federal employees to choose whether to participate in the president’s payroll tax deferral program. The Protecting Employees from Surprise Taxes Act by Sen. Chris Van Hollen (D-MD) would require written consent from employees before any more of their payroll taxes are deferred until next year. It would also require employers to explain the tax consequences of the deferral.

Although the legislation would not be retroactive to those taxes already deferred, it would allow federal employees to opt-out going forward, which would minimize their added tax obligations next year. NTEU has been critical of the administration’s implementation of the program and has yet to receive a response from the Office of Management and Budget for more information on issues surrounding it.

“Under Sen. Van Hollen’s bill, federal employees who want to participate in the deferral would be able to continue doing so, which is how the federal government should have structured the program in the first place,” said National President Tony Reardon. Read more