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IRS Issues Guidance to Implement Presidential Memorandum Deferring Certain Employee Social Security Tax Withholding

The Department of Treasury and the Internal Revenue Service recently released guidance implementing the Presidential Memorandum issued on August 8, 2020 allowing 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.

Notice 2020-65 makes relief available for employers and generally applies to wages paid starting September 1, 2020 through December 31, 2020.

Please note from the guidance, if an employer elects to defer withholding and payment of the employee’s portion of the Social Security tax, the taxes must be paid between January 1, 2021 and April 30, 2021 or interest, penalties and additions to tax will accrue to the employer.  The notice indicates that an Affected Taxpayer may make arrangements to otherwise collect the total Applicable Taxes from the employee.  However, collection may be difficult if the employee is no longer employed or does not make enough money.

If you have any questions, please contact us.  

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