# Pandemic Payroll Tax Suspension Act

This bill would eliminate payroll taxes for workers and employers for the years 2021 and 2022. Payroll taxes are the money that gets taken out of your paycheck for Social Security and Medicare, as well as what your employer pays on your behalf. Under this proposal, both employees and employers would pay zero percent in these taxes during that two-year period, meaning workers would see more money in their paychecks and employers would keep more of what they pay in wages.

The catch is that this isn't free money—it's a shift in how these programs get funded. Social Security and Medicare rely on payroll taxes to operate, so if those taxes disappear, the government would need to transfer money from the general Treasury to keep these programs running. Essentially, the bill says the government would cover the lost revenue so that Social Security and Medicare benefits could continue being paid out as normal. This means the cost would be covered by general tax revenue or borrowing rather than by the dedicated payroll taxes that normally fund these programs.

The practical effect would be immediate relief for workers' wallets and employer budgets during 2021 and 2022. However, this creates a significant question about long-term funding: after 2022 ends, payroll taxes would resume at normal rates, but the trust funds that support Social Security and Medicare would have lost two years of contributions. The bill doesn't address what happens after the suspension period ends or how the system would recover from this temporary funding gap. It's worth noting this bill was introduced in March 2022, so it was addressing a situation where 2021 had already passed, making the timing somewhat unusual.

Pandemic Payroll Tax Suspension Act

Gosar, Paul A.

Pandemic Payroll Tax Suspension Act This bill suspends payroll taxes (i.e., employment and self-employment taxes) in 2021 and 2022. The bill requires the transfer of funds from the Treasury to the Old-Age and Survivors Trust Fund, the Disability Trust Fund, and the Social Security Equivalent Benefit Account to compensate for the reduction in revenues resulting from the suspension of taxes under this bill.