County says ‘no’ to payroll tax deferment

There is ‘no guarantee’ that payment will be forgiven, county commissioners say

Jack Stewart (left) and Marc Hader (right)

By Conrad Dudderar
Senior Staff Writer

EL RENO – Canadian County Commissioners have decided not to participate in a federal program that would have reduced county government employees’ payroll taxes – at least through the end of 2020.

Commissioners discussed this week having Canadian County join the President Trump Payroll Tax Deferment Plan.

The three-member board, at their weekly meeting Sept. 8, voted 3-0 not to participate in the program because there is no guarantee the payroll taxes would be forgiven.

Canadian County Commission Chairman Marc Hader said President Trump signed an executive order authorizing this payroll tax deferment plan to help citizens impacted by COVID-19.

Hader cited the “gridlock” at the federal level between the U.S. Senate and U.S. House of Representatives over the next round of coronavirus relief funding designed to stimulate the economy.

Companies and government entities that choose to participate in the program may defer some payroll taxes due between Sept. 1 and Dec. 31. However, as it stands now, those payroll taxes would have to be paid back between Jan. 1 and April 30, 2021.

The payroll taxes would be postponed – but not forgiven.

“Employees would be responsible for the taxes – just not immediately,” said Hader, reading an excerpt from a Forbes Magazine article. “That means employers who stop withholding payroll taxes now would be able to withhold twice as much early next year.”

Employers who suspend collection of employees’ Social Security payroll taxes during this four-month period must repay the deferred taxes to the IRS during the first four months of 2021 – unless legislation is enacted to forgive the uncollected taxes.

“I think it would be a really hard hit on the employee next year,” District 3 County Commissioner Jack Stewart said. “It sounds like this (program) is maybe more set up for employees that have been furloughed or laid off and don’t have a huge steady income.
“We have had no furloughs with the county. (A county employee) may be hurting for money, but not because of unemployment.”

Canadian County has about 400 employees.



Without new legislation, employees who have payroll taxes deferred would notice a decrease in their net pay in 2021, officials said.

“We will take any steps possible to forgive this deferral so employees would not be required to pay back tax amounts deferred through December 31,” White House economic advisor Larry Kudlow said.

The federal government, through its Payroll Protection Program, has forgiven many small business loans provided in previous stimulus packages.

“My thought is, there is no guarantee of future legislation,” Chairman Hader said. “I think people might like a little more in their paycheck, but I don’t think people are going to love the idea of having kind of a ‘double hickey’ down the road to compensate for it.”

Canadian County Clerk Sherry Murray shared another concern – trying to collect deferred payroll taxes from an employee who separates employment with the county.

County officials believe this payroll tax deferment plan is better suited for employees of businesses severely impacted by COVID-19, such as the tourism industry.

“That little bit of relief would be something of value to them,” Commissioner Hader said.
Commissioner Stewart agreed, saying, “I just can’t see that county employees would fall into that category.”

In other business at their Sept. 8 meeting, Canadian County Commissioners approved:
• A permanent installation permit for Pioneer Telephone Cooperative to install underground fiber optic along about 60 miles in District 1.
• A construction funding request for the county fairgrounds project, which includes paying Western Aggregate nearly $39,000 for parking lot materials.

Meanwhile, commissioners tabled awarding a bid for a generator at the county sheriff’s annex. Two bids were received – $47,770 from King Electric and $35,465 from Clifford Power Systems.