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Cuomo's payroll for income tax swap could alter Social Security

holbritter

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It's one of many wrinkles in complex still-evolving plan to deal with SALT

ALBANY — Your Social Security payments may go down a bit, but you may also receive less upon retirement if a complex plan to deal with federal tax changes goes through in New York.
Gov. Andrew Cuomo’s plan to offset the loss of federal tax deductions is still being finalized and is scheduled to be presented to lawmakers in the coming weeks.

By swapping employee-paid state income tax for a payroll tax funded by employers, the governor and his budget planners hope to circumvent the new $10,000 cap on federal deductibility of state and local taxes, including state income taxes.

The plan is complicated and has a lot of moving parts. And the latest twist may involve the impact of such a swap on the Social Security taxes that wage earners pay during their working years and collect in retirement.

If wage earners had no state income taxes, that could go a long way to countering the loss of SALT. But to do that, employers would likely reduce their employees’ overall gross pay to fund their own higher payroll tax.
With lower gross pay, wage earners could also realize modest savings since they would pay lower proportionate Social Security taxes which are separate from federal income taxes.
But they would also collect less upon retirement.

“It’s going to hurt them a little bit when they start collecting,” said Charles Capetanakis, a CPA and tax attorney at Davidoff Hutcher & Citron.

https://www.timesunion.com/news/article/Cuomo-s-payroll-for-income-tax-swap-could-alter-12544240.php


So Cuomo wants to bully this never been tried before complex tax switcheroo through to lawmakers. Instead of him and others in high tax states, facing the issues that make the taxes so high.

I knew Cuomo and other head of states would take heat after the SALT was passed. People knew their taxes were high, but knew they could deduct from the federal, so it wasn't that big of a deal. Now that its reality time, it exposes the state's govt. to the full backlash and criticism of these high taxes. They are finally feeling the heat and instead of facing the high tax problem, Cuomo is trying to weasel out and use this scheme, blame it on the Feds and **** working New Yorkers.

This is a very bad idea.

Thoughts from any tax guru's?

Another link from a 'not so local' source. https://www.nytimes.com/2018/01/04/nyregion/new-york-payroll-tax-income-tax-plan.html
 
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It's one of many wrinkles in complex still-evolving plan to deal with SALT

ALBANY — Your Social Security payments may go down a bit, but you may also receive less upon retirement if a complex plan to deal with federal tax changes goes through in New York.
Gov. Andrew Cuomo’s plan to offset the loss of federal tax deductions is still being finalized and is scheduled to be presented to lawmakers in the coming weeks.

By swapping employee-paid state income tax for a payroll tax funded by employers, the governor and his budget planners hope to circumvent the new $10,000 cap on federal deductibility of state and local taxes, including state income taxes.

The plan is complicated and has a lot of moving parts. And the latest twist may involve the impact of such a swap on the Social Security taxes that wage earners pay during their working years and collect in retirement.

If wage earners had no state income taxes, that could go a long way to countering the loss of SALT. But to do that, employers would likely reduce their employees’ overall gross pay to fund their own higher payroll tax.
With lower gross pay, wage earners could also realize modest savings since they would pay lower proportionate Social Security taxes which are separate from federal income taxes.
But they would also collect less upon retirement.

“It’s going to hurt them a little bit when they start collecting,” said Charles Capetanakis, a CPA and tax attorney at Davidoff Hutcher & Citron.

https://www.timesunion.com/news/article/Cuomo-s-payroll-for-income-tax-swap-could-alter-12544240.php


So Cuomo wants to bully this never been tried before complex tax switcheroo through to lawmakers. Instead of him and others in high tax states, facing the issues that make the taxes so high.

I knew Cuomo and other head of states would take heat after the SALT was passed. People knew their taxes were high, but knew they could deduct from the federal, so it wasn't that big of a deal. Now that its reality time, it exposes the state's govt. to the full backlash and criticism of these high taxes. They are finally feeling the heat and instead of facing the high tax problem, Cuomo is trying to weasel out and use this scheme, blame it on the Feds and **** working New Yorkers.

This is a very bad idea.

Thoughts from any tax guru's?

Another link from a 'not so local' source. https://www.nytimes.com/2018/01/04/nyregion/new-york-payroll-tax-income-tax-plan.html

Looks like he's just out to save the rich money.

I'm against it since it doesn't really do much, and it complicates the tax system farther. We need more simplification. Not more complexity.

One thing Trumps new tax system did was limit the deductions the rich can take to reduce their federal taxes. The liberals should love this.
 
It's one of many wrinkles in complex still-evolving plan to deal with SALT

ALBANY — Your Social Security payments may go down a bit, but you may also receive less upon retirement if a complex plan to deal with federal tax changes goes through in New York.
Gov. Andrew Cuomo’s plan to offset the loss of federal tax deductions is still being finalized and is scheduled to be presented to lawmakers in the coming weeks.

By swapping employee-paid state income tax for a payroll tax funded by employers, the governor and his budget planners hope to circumvent the new $10,000 cap on federal deductibility of state and local taxes, including state income taxes.

The plan is complicated and has a lot of moving parts. And the latest twist may involve the impact of such a swap on the Social Security taxes that wage earners pay during their working years and collect in retirement.

If wage earners had no state income taxes, that could go a long way to countering the loss of SALT. But to do that, employers would likely reduce their employees’ overall gross pay to fund their own higher payroll tax.
With lower gross pay, wage earners could also realize modest savings since they would pay lower proportionate Social Security taxes which are separate from federal income taxes.
But they would also collect less upon retirement.

“It’s going to hurt them a little bit when they start collecting,” said Charles Capetanakis, a CPA and tax attorney at Davidoff Hutcher & Citron.

https://www.timesunion.com/news/article/Cuomo-s-payroll-for-income-tax-swap-could-alter-12544240.php


So Cuomo wants to bully this never been tried before complex tax switcheroo through to lawmakers. Instead of him and others in high tax states, facing the issues that make the taxes so high.

I knew Cuomo and other head of states would take heat after the SALT was passed. People knew their taxes were high, but knew they could deduct from the federal, so it wasn't that big of a deal. Now that its reality time, it exposes the state's govt. to the full backlash and criticism of these high taxes. They are finally feeling the heat and instead of facing the high tax problem, Cuomo is trying to weasel out and use this scheme, blame it on the Feds and **** working New Yorkers.

This is a very bad idea.

Thoughts from any tax guru's?

Another link from a 'not so local' source. https://www.nytimes.com/2018/01/04/nyregion/new-york-payroll-tax-income-tax-plan.html

Obviously intelligent state budget cutting was not considered first.
 
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