On August 28, 2020, the IRS issued Notice 2020-65 providing guidance to employers on the payroll tax deferral memorandum ordered by President Trump earlier this month, which will allow employers to defer certain employee Social Security tax withholdings (the 6.2% employee FICA tax) until early 2021. For employees with bi-weekly wages less than $4,000, payroll taxes that would normally be due between September 1, 2020 and December 31, 2020, will now be due between January 1, 2021 through April 30, 2021. Any repayments after April 30, 2021 will include interest, penalties and additions to the tax.
Even though it is a deferral, President Trump has authorized the Secretary of the Treasury to look into making the deferral permanent. If you have any questions or need assistance, please connect with your Warren Averett advisor or have a member of our team reach out to you.