The Department of Treasury and Internal Revenue Service have issued guidance implementing the Presidential Memorandum issued on Aug. 8, 2020. This allows employers to defer withholding and payment of the employee’s portion of the Social Security tax if the employee’s wages are below a certain amount.
In short, employers can defer withholding Social Security tax from eligible employees’ wages paid on a pay date from September 1st through December 31st 2020. Employers will then withhold the deferred taxes from an employee’s wages during the period of January 1st 2021 through April 30th 2021. Eligible employees are defined as receiving less than $4,000 compensation in a by-weekly pay period. Employees receiving $4,000 or more in a bi-weekly pay period are not eligible for this deferral.
We will post additional information as more guidance becomes available.
