Treasury and IRS Issue Guidance Implementing Trump’s Payroll Tax Deferral Memorandum
The Department of Treasury and the Internal Revenue Service (IRS) issued guidance implementing the Presidential Memorandum issued on August 8, 2020 which allows employers to defer the withholding and payment of the employee’s portion of the Social Security tax if the employee’s wages are below a certain amount.
Specifically, Notice 2020-65 states that the deferral applies to wages paid beginning September 1, 2020 through December 31, 2020. The deferral is available to any employee whose wages or compensation during any bi-weekly pay period are less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay cycles. No deferral is permitted for wages that are more than $4,000 on a bi-weekly basis.
The notice sets a deadline of April 30, 2021 for employees to pay back the deferred Social Security tax. Deferred payroll taxes can only be forgiven by an act of Congress.
© 2023 Signatory Wall and Ceiling Contractors Alliance (SWACCA). All rights reserved.