Cape County takes no action on tax deferment opportunity

An optional government program allowing employers to defer Social Security tax withholdings from their employees’ paychecks apparently won’t affect Cape Girardeau County government employees.

Members of the County Commission on Thursday heard from county payroll director Gina Snyder, who said the program has a downside for both employers and employees. The program, announced in late August by U.S. Treasury Department, became available Sept. 1 and is intended to provide a short-term boost to the nation’s economy during the COVID-19 pandemic.

“This is just a deferment, it is not a forgiveness,” said Snyder, who looked into the pros and cons of the deferral program after some of the county’s 218 employees asked about it.

If an employer elected to participate in the program, the employer’s employees would see larger paychecks between now and the end of the year. But then the withholding would be doubled from January through April of next year.

“And if we were to do this, and an employee were to leave employment prior to getting the collected taxes back, the employer could be on the hook for paying those taxes,” Snyder said.

The county payroll director said the county’s outside CPA firm has also “advised against taking part in this deferral.”

Although the commissioners could have elected to defer the tax withholdings until next year, they decided instead to take no action.

“Nothing changes unless (the county) takes action to do so,” Presiding Commissioner Clint Tracy said.

“I don’t see the advantage to anybody if, all of the sudden, next January you’re going to (start paying) double the amount you didn’t pay this year,” First District Commissioner Paul Koeper said after hearing from Snyder.

Tracy agreed: “If people want to reduce their withholding, they can do another W-4 form. You can do that and withhold nothing.”

“But then the day of reckoning comes when you fill out your taxes next year,” Koeper said.

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