Social Security Tax Deferrals
Friday, September 4th, 2020
On August 8, 2020, President Trump issued a Presidential Memorandum as part of the ongoing COVID-19 relief efforts. This memorandum authorizes the deferral of employee social security taxes from September 1, 2020, through December 31, 2020.
Employers should offer this deferral to employees, and work with their payroll providers to determine how to process this deferral. It is extremely important that employees know that this is a deferral, not a forgiveness! Any amounts deferred during 2020 must be withheld from employees between January 1 through April 30, 2021 and remitted to the IRS before May 1, 2021.
The order does give the option for Congress to waive the repayment requirement, but that would of course require legislative action. Employers should inform employees that they should expect to repay the deferred taxes.