7/12/2023 0 Comments Payroll tax deferral guidance![]() Other than the employee goodwill that is created by not withholding the employee Social Security tax, the notice provides many burdens and uncertainties for the employer: The deferral is not a suspension of the payroll tax, and an employee will have twice as much Social Security tax withheld for the period Januthrough Ap(assuming that pay remains the same).Deferral of the employee share of Social Security tax results in an increased amount of take-home pay.The above limits appear to be a “cliff,” meaning if gross earnings for that specific payroll period exceed the threshold amounts then none of the employee wages are eligible for deferral.Any employee whose gross earnings are $4,000 or less on a bi-weekly payroll or $4,333 on a semi-monthly payroll.Chamber of Commerce has stated that many employers will likely decline to implement a deferral, choosing instead to continue to withhold and remit to the government the payroll taxes required by law. ![]() This notice answers some questions regarding the deferral of employee Social Security tax, but is silent on critical issues. The Treasury issued additional guidance on August 28, in IRS Notice 2020-65. Any Social Security tax deferred for this period would be subject to an additional withholding amount from the employee’s paycheck from Januthrough April 30, 2021. Employees can defer paying their share of Social Security tax on applicable wages paid from Septemthrough December 31, 2020. On August 8, 2020, President Trump issued a presidential memorandum directing the secretary of the treasury to defer the withholding, deposit, and payment of certain payroll tax obligations. Have questions about the payroll tax deferral?
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