The Trump administration announced Friday that the collection of some Social Security taxes is suspended until the end of the year.

Donald Trump
Reutersconnect

The Trump administration released the guidance on payroll tax deferral less than 24 hours after the conclusion of the Republican National Convention. This is to make sure that millions of individuals and families will have enough money to meet their daily needs amid the global pandemic.

The suspension of Social Security Tax was both embraced and criticized. Some said that this will cause headaches for both employees and employers next year but many said that this could help many since payment intended for the Social Security tax can be used for daily expenses while waiting for the next round of stimulus aid.

The decision of Trump's administration to suspend the collection of Social Security tax will allow employers to offer their workers a temporary deferral of the 6.2 percent payroll tax until the end of this year.

Some are worried that they might pay a huge amount next year as the taxes owed would not be forgiven, and instead would come due in 2021.

when Trump signed and issued the executive order for the unemployment benefits early this month, he said he plans to terminate the collection of Social Security tax.

Trump was criticized for this action but as a President, he is doing his effort to at least help millions of Americans who are suffering from financial crises due to the pandemic.

However, it is not clear as to how many employers will take the option to help their employees.

In releasing the guidelines, the Treasury Department said: "The guidance allows employers to defer withholding and paying the employee's portion of the Social Security payroll tax if the employee's wages are below a certain amount."

Trump strongly argued that cutting off the Social Security tax means more money on workers' pockets for the rest of this year and this will boost the economy.

Even though some business owners are adamant to offer the suspension of the Social Security Tax collection because they might have difficulties in collecting it next year, Trump already said that he will terminate the collection once gets reelected.

"At the end of the year, the assumption that I win, I'm going to terminate the payroll tax, which is another thing that some of the great economists would like to see done," Trump told a reporter earlier this month.

"Tremendous growth in the U.S. will cover the costs of Social Security. We'll be paying into Social Security through the general fund," he added.

The Trump administration clarified that the President is only referring to permanently forgiving the taxes that would be deferred this year, but the President himself has repeatedly indicated he has much bigger ideas in mind.

One of these could be the second round of stimulus that he keeps on pushing but the Democrats keep on declining.

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