5 On Your Side: The bump in your paycheck will have to be repaid

You may see a difference in your next paycheck.

President Donald Trump’s payroll tax cut is now in place. It’s an executive order that runs through the end of the year to help families, according to Trump.

But it’s not free money.

The payroll tax cut allows employers to suspend the deduction of the Social Security tax employees normally pay to fund the program.

It’s 6.2% of your gross income that may now stay in your paycheck. But it’s a deferral, not a forgiveness.

The latest information makes employers responsible for then withholding the deferred tax from employees next year and forwarding it to the government by April 30, 2021. Otherwise, they’ll face penalties, interest and additional tax.

Some employers decided not to participate, so you’ll need to check with yours.

There are also some restrictions on who is eligible for the cut. It applies to employees earning $104,000 a year or less, although there are caveats that could impact those who get bonuses or overtime.

The bottom line: If you see that extra money, know you will owe it to the IRS early next year unless Congress takes action to change that.

Here's what the payroll tax deferral action means for you