How 2020's Payroll Tax Holiday Could Affect Your Taxes in 2021
If you saw an increase in your paychecks late last year, don't fall into the myth of believing it was free money arriving out of thin air. It was actually the result of a payroll tax deferral that was put into effect on Sept. 1 in order to provide some stimulus to the economy. But that extra money you took home was more of a loan than a gift, and it likely will impact the taxes you pay in 2021.
In August, President Trump issued an order allowing employers to defer payroll taxes for employees from Sept. 1 through Dec. 31, so if your employer participated, your paychecks during that period would have been larger by the 6.2% that is normally deducted in Social Security taxes. You would, however, have continued to see deductions for the other payroll taxes listed below.
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Source Fool.com
