On August 8, 2020, President Trump signed a memorandum allowing employees making up to $4,000.00 pretax biweekly to defer paying their portion of Social Security taxes. The tax deferral went into effect on September 1, 2020, and will end on December 31, 2020.
At this point and time, the monies deferred will have to be paid back in full. Guidance put out by the IRS on August 28, 2020, suggests that it will have to be paid back in full by April 30, 2021. It will be an additional deduction from the employee’s check. The guidance also suggests that ultimately the employer is responsible for the repayment of these taxes.
Payroll Service Solutions is not automatically deferring this tax. If you have an employee who would like to his or her their Social Security tax, contact our office to obtain the necessary paperwork.