Senator Collins Cosponsors Bipartisan Legislation to Make Payroll Tax Deferral Optional for All Employees

Washington, D.C. – U.S. Senator Susan Collins (R-ME) joined a group of Senators in introducing the Protecting Employees from Surprise Taxes Act, bipartisan legislation that would make the payroll tax deferral optional for both private and public employees. 


“As we continue to battle this public health and economic crisis, it is imperative that employees are given the choice on whether or not to defer their payroll taxes,” said Senator Collins.  “Our bipartisan bill would empower workers to make the financial decision that works best for them and their families.”


Specifically, the legislation would require employers to affirmatively receive an employee’s consent prior to deferring their employee payroll.  If an employer defers the withholding of an employee’s payroll taxes without that employee’s consent, this legislation would protect the employee by making the employer responsible for those unpaid taxes.  In addition, the bill would require employers who are participating in the deferral to provide notice to their employees explaining the tax consequences of the deferral and their right to participate or not.


More than a dozen federal employee organizations and unions have endorsed the legislation, including the American Federation of Government Employees, National Treasury Employees Union, National Federation of Federal Employees, Senior Executive Association, Professional Managers Association, and the National Active and Retired Federal Employees Association.


In addition to Senator Collins, the Protecting Employees from Surprise Taxes Act was introduced by Senator Chris Van Hollen (D-MD) and cosponsored by Senators Ron Wyden (D-OR), Mark Warner (D-VA), Ed Markey (D-MA), Elizabeth Warren (D-MA), Michael Bennet (D-CO), Kyrsten Sinema (D-AZ), Ben Cardin (D-MD), Jack Reed (D-RI), Tim Kaine (D-VA), Richard Blumenthal (D-CT), Sheldon Whitehouse (D-RI), Mazie Hirono (D-HI), Dick Durbin (D-IL), Joe Manchin (D-WV), Patty Murray (D-WA), and Dianne Feinstein (D-CA).


Last month, Senator Collins led a bipartisan letter urging Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Russell Vought to make the payroll tax deferral outlined by President Trump optional for federal employees and service members.  In their letter, the Senators also pushed for answers on how the Administration plans to implement the deferral.


Click HERE to read the text of the bill.