Guidance on Payroll Tax Deferral
In early August, President Trump directed the Secretary of the Treasury to defer the withholding, deposit, and payment of certain payroll tax obligations as a way to provide financial assistance to individuals impacted by COVID-19. Employers may suspend the withholding of the 6.2% Social Security payroll tax for wages paid between September 1st and December 31, 2020 if the biweekly compensation of the employee is less than $4,000. Withholding and remitting the deferred tax is the responsibility of the employer beginning in January.
Guidance was provided by the Treasury and IRS on August 28th, but leaves a number of questions unanswered. Member accounting firm McKonly & Asbury and the U.S. Chamber of Commerce provide some additional guidance for employers.