State of Illinois employees will not see the payroll tax deferral on their paychecks. President Donald Trump signed an executive order on August 8th that allows employers to defer withholding Social Security taxes. The deferral would last through the end of the year. The employer and the employee would be responsible for repaying the deferred taxes beginning in January. The Social Security tax is set for employees by law at 6.2%. The deferred taxes would be collected from January 1st through April 30th next year or the wage earner and employer would accrue interest and penalties.
In a memo issued to all state agency directors yesterday by Deputy Governor of Budget & Economy Dan Hynes, state agencies have elected to not implement the optional payroll tax deferrals for state employees. Agencies will continue to collect taxes as they normally would.
Employers have the option of deferring the tax if they meet particular conditions with the U.S. Treasury Department and the IRS.