Client Alert: To Defer or Not to Defer—Efficacy of President Trump’s Payroll Tax Memorandum

Employers, payroll processors, and their advisors are essentially ignoring the President’s payroll tax deferral memo, and Treasury’s limited guidance, as unworkable. One employer, however, seems undeterred by the concerns plaguing private employers—the federal government. Senior federal officials announced that the federal government, as an employer, will implement the President’s payroll tax deferral. See https://federalnewsnetwork.com/pay/2020/08/trump-aiming-for-late-september-launch-of-payroll-tax-deferral-for-federal-employees/.

For now, the federal government appears to be an outlier in plans to adopt the deferral. News outlets report that employer groups and employers are, in general, not planning to implement the deferral despite Treasury’s recent guidance. See e.g., US Chamber of Commerce, https://www.uschamber.com/letters-congress/coalition-letter-the-executive-order-deferring-payroll-tax-obligations (given the burdens on employees and employers under current guidance “many of our members will likely decline to implement deferral, choosing instead to continue to withhold and remit to the government the payroll taxes required by law”); https://www.wsj.com/articles/trump-payroll-tax-deferral-leaves-employers-wary-as-plan-starts-11598958000 (“many employers are unlikely to adopt the policy”).

The payroll tax deferral memo would give employees a short-term boost in take-home pay; one that will be required to be paid back next year—effectively resulting in a short-term interest free loan to employees. In a political sense, the payroll tax deferral appears to be an attempt to break a legislative logjam and probably intended to boost the President’s approval in the months before the November election. So far, the deferral is not likely to benefit many private employers and employees. The obligation to repay deferred payroll taxes, administrative and implementation burdens, and employers’ ultimate risk of repayment have made the program unpalatable. And the potential political benefits appear to be muted by a general sense that the payroll tax deferral is unworkable and will not be widely implemented.

In this Alert, we summarize the memorandum and Treasury guidance, answer some basic questions about the program, and describe the reasons why employers are wary and are unlikely to implement the deferral.

To read the full alert, please click here

Related Capabilities

Related Locations

© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.

Client Alert: To Defer or Not to Defer—Efficacy of President Trump’s Payroll Tax Memorandum

Employers, payroll processors, and their advisors are essentially ignoring the President’s payroll tax deferral memo, and Treasury’s limited guidance, as unworkable. One employer, however, seems undeterred by the concerns plaguing private employers—the federal government. Senior federal officials announced that the federal government, as an employer, will implement the President’s payroll tax deferral. See https://federalnewsnetwork.com/pay/2020/08/trump-aiming-for-late-september-launch-of-payroll-tax-deferral-for-federal-employees/.

For now, the federal government appears to be an outlier in plans to adopt the deferral. News outlets report that employer groups and employers are, in general, not planning to implement the deferral despite Treasury’s recent guidance. See e.g., US Chamber of Commerce, https://www.uschamber.com/letters-congress/coalition-letter-the-executive-order-deferring-payroll-tax-obligations (given the burdens on employees and employers under current guidance “many of our members will likely decline to implement deferral, choosing instead to continue to withhold and remit to the government the payroll taxes required by law”); https://www.wsj.com/articles/trump-payroll-tax-deferral-leaves-employers-wary-as-plan-starts-11598958000 (“many employers are unlikely to adopt the policy”).

The payroll tax deferral memo would give employees a short-term boost in take-home pay; one that will be required to be paid back next year—effectively resulting in a short-term interest free loan to employees. In a political sense, the payroll tax deferral appears to be an attempt to break a legislative logjam and probably intended to boost the President’s approval in the months before the November election. So far, the deferral is not likely to benefit many private employers and employees. The obligation to repay deferred payroll taxes, administrative and implementation burdens, and employers’ ultimate risk of repayment have made the program unpalatable. And the potential political benefits appear to be muted by a general sense that the payroll tax deferral is unworkable and will not be widely implemented.

In this Alert, we summarize the memorandum and Treasury guidance, answer some basic questions about the program, and describe the reasons why employers are wary and are unlikely to implement the deferral.

To read the full alert, please click here

Related Capabilities

Related Locations

© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.

News and Insights

Event

Associate Steven Arango to Speak at the Veterans' Legal Career Fair

On September 18, Associate Steven Arango will speak on a panel at the Veterans' Legal Career Fair (VLCF), the only legal career fair in the United States dedicated to veterans, active-duty service members, and military spouses.

September 18, 2026

Publications

In American Banker, Partner Laurel Loomis Rimon Weighs in on OCC's Handling of Fintech Bank Charter Applications

Partner Laurel Loomis Rimon spoke with American Banker about how the Office of the Comptroller of the Currency is approaching bank charter applications from fintechs, amid a growing wave of companies seeking charters from federal regulators.

August 18, 2026

Event

Partner David Greenwald to Speak at PLI Program on Privilege and AI

On August 17, David Greenwald will speak at "Fitting New “Tech” Into the Attorney-Client Privilege and Work Product Protection," a virtual program hosted by the Practising Law Institute (PLI).

August 17, 2026