OSPS E-News ~ FW: IMPORTANT - State of Oregon will not participate in optional payroll tax deferral

[Announcements from OSPS to the users of the Oregon State Payroll Application]

FYI - From Katy Coba:

Colleagues

The State of Oregon has made the official decision to opt out of the federal executive order providing for an optional payroll tax deferral.  You can see a detailed explanation about why we made this decision below.

Thank you,

Katy


The Payroll Tax Deferral Executive Order signed by President Trump allows employers to discontinue the collection of payroll taxes from employees for the period of September 1, 2020-December 31 2020.

Employers are not required to participate in the Payroll Tax Deferral.

One of the key concepts of this Executive Order is that it is a deferral, and the tax will have to be repaid to the employer by the employee.

There is a wage threshold for eligibility for the deferral, and not all employees will be eligible.

If the State of Oregon had determined that they wanted to participate, we would have still been required to remit the payroll tax that would have been paid by the employee.

Employees must repay the amount deferred to the employer after January 1, 2021, unless there is action by the U.S. Congress.

There does not appear to be clear direction regarding employees that leave employment before they have reimbursed the employer.

The tax implications for the employee remain unclear.

Due to the uncertainty of the process, the potential of additional costs to the state, and the hardship to employees during the repayment period, we are not participating at this time. If new information is made available, we will revisit this decision as appropriate.


-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://omls.oregon.gov/pipermail/osps-news/attachments/20200914/fbd82233/attachment.html>