Not all employees will see Social Security tax deferment from checks, IRS says

WASHINGTON — The Department of Treasury and Internal Revenue Service Friday issued guidance implementing the Presidential Memorandum issued on August 8, 2020, allowing employers to defer withholding and payment of the employee’s portion of the Social Security tax if the employee’s wages are below a certain amount.

Notice 2020-65, makes relief available for employers and generally applies to wages paid starting September 1, 2020, through Dec. 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 bi-weekly 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 bi-weekly pay period.

Friday’s notice postpones the time for employers to withhold and pay employee Social Security taxes.

Employers and employees each pay 6.2 percent of wages for Social Security, up to the taxable maximum of $137,700, while the self-employed pay 12.4 percent.

The deferment means that both employers and employees will still have to pay the taxes that are being withheld at some point next year before Tax Day.

[pdf-embedder url=”https://fallriverreporter.com/wp-content/uploads/2020/08/n-20-65.pdf”]