Companies that did not withhold the taxes — meaning workers received a bigger paycheck — would then be responsible for paying back the money from January through April, by withholding twice the normal amount of the tax. If an employee left the company before the repayment was complete, the business would effectively find itself on the hook for the tax bill. If the employee stayed, they would be in line for what amounts to a surprise winter pay cut, with paychecks shrinking for four months to make up for the added pay in the fall.
Mr. Moore had wanted the Treasury Department to go further, and require companies to participate. But as written, tax experts said, the department’s guidance gave little incentive for large corporations to sign up — and several reasons not to.
“A lot of companies are looking at this and saying, this has too many challenges,” said Caroline L. Harris, the vice president for tax policy and economic development at the U.S. Chamber of Commerce. “I have not heard from any companies that intend to do this.”
That was not the case with the employer-side payroll tax deferral that Congress included in an early economic relief package. Some publicly traded companies, including SAIC and Staffing 360 Solutions, said in earnings calls this year that they were taking advantage of the deferral to bolster their cash flows during the economic downturn.
Some small businesses have said they will opt in and defer payroll taxes for workers, including ones owned by political supporters of Mr. Trump like an off-track betting company on Long Island, overseen by the chairman of the Nassau County Republican Party. But there were only two main reasons a private company might participate in the president’s deferral plan, said Rohit Kumar, a leader of the national tax office for PwC in Washington.
One was to provide employees with a short burst of additional cash in a difficult stretch for the economy. The other, Mr. Kumar said, would be a bet on Congress passing a bill, as Mr. Trump has requested, to cancel the unpaid tax liability for workers, turning the tax deferral into a four-month tax holiday.
But, Mr. Kumar said, “I have not advised anybody to be planning their lives around a holiday coming around next year.”