(513) 858-6040
Secure File Upload
Pay
Client Center
What You Need to Know About the Deferral of Payroll Tax Obligations
Sep 15, 2020
Our office has received numerous inquiries about President Trump’s recent memorandum. On August 8, 2020, President Trump signed an executive order allowing an elective deferral of the 6.2% employee share of Social Security tax. The deferral period runs September 1, 2020 to December 31, 2020. The deferral is only available to employees who have bi-weekly pay less than $4,000 or $104,000 on an annual basis.
The decision to defer the payment of the employee’s share of Social Security tax rests with the employer and is not mandatory. At this point, it appears implementation and administration of the payroll tax deferral may outweigh the benefits. Here are the details for you to consider:
- The deferred social security tax will be repaid during the time period ranging from January 1, 2021 to April 30, 2021 via remittance by the employer
- The employer is required to withhold additional payroll tax withholdings from the employee to pay the deferred amount
- There are many unanswered questions pertaining to the deferral of payroll taxes. (i.e. who is obligated to re-pay the deferred portion if an employee terminates employment)
Contact us so we can help you to understand the impact of the payroll tax deferral on your organization.
More Resources
About The Author
Kirsch CPA Group is a full service CPA and business advisory firm helping businesses and organizations with accounting,…
Accounting & Financial News
IRS to Discontinue Paper Checks
Earlier this year, President Trump signed an Executive Order directing federal agencies to adopt electronic payment methods for all transactions…
Avoiding Tax Trouble with Owner Compensation in Manufacturing
Smaller manufacturing companies often operate as S corporations. In many cases, one of the shareholders (or perhaps…
Activity-Based Costing May Benefit Some Contractors
In an uncertain economy, accurate and actionable job cost accounting is more important than ever. If you haven't already, consider…
