Presidential Memorandum Defers Withholding and Payment of Social Security Taxes

On Friday, August 28, 2020, the Treasury Department issued guidance regarding the Presidential Memorandum signed by President Trump on August 8, 2020. IRS Notice 2020-65 allows employers to defer the employee portion of Social Security payroll taxes for employees generally making less than $4,000 per bi-weekly pay period (or an equivalent amount for other pay periods) effective from September 1, 2020 through December 31, 2020, and requires the deferred taxes to be repaid ratably over the first four months of 2021. Additionally, IRS Notice 2020-65 appears to leave employers responsible for collecting the taxes from employees in 2021 and implies they must recoup deferred liabilities from those employees who have departed prior to or during the collection period. 

 ExponentHR is prepared to support this Presidential Memorandum, however, the current guidance provided is still ambiguous and lacks direction. As of now, this week’s payroll will be unaffected, but ExponentHR will notify clients as soon as additional guidance is provided.