On Friday, August 28, 2020, the IRS issued guidance related to President Trump’s executive order for the deferral of payroll taxes, specifically the employee share of the Social Security tax. The order indicates that the employer has the option to defer withholding and payment of this tax until January 1, 2021, through April 30, 2021.
This only applies to wages and compensation less than the threshold amount of $4,000 per bi-weekly pay period, or the equivalent threshold amount with respect to other pay periods. At this time there are still a lot of unknown details about the implementation of the deferral and collection and payment by the employer.
Employers may want to consider waiting on deferral of taxes until further guidance is available.