The Department of Treasury and Internal Revenue Service issued Notice 2020-65, which provides guidance on implementing the Presidential Memorandum that allows employers to defer withholding and payment of the employee’s portion of the Social Security tax if the employee’s wages fall below a certain amount.
Notice 2020-65 provides relief for employers and generally applies to wages paid starting September 1, 2020 through December 31, 2020.
The employee Social Security tax deferral may apply to payments of taxable wages to an employee that are less than $4,000 during a biweekly pay period, with each pay period considered separately. No deferral is available for any payment to an employee of taxable wages of $4,000 or above for a biweekly pay period. Amounts deferred need to be paid ratably between January 1, 2021 and April 30, 2021, or else interest, penalties and additions to tax will begin to accrue on May 1, 2021.
For additional tax relief information related to the COVID-19 pandemic, visit IRS.gov or please call any Sponsel CPA Group Team member or our colleagues listed below.
This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.