Deferring Payroll Tax Obligations
These details are subject to anticipating changes and clarifications after September 9, 2020
Dated: September 9, 2020 (These details are subject to anticipated changes and clarifications after this date).
Summary: This letter is designed to inform our clients and contacts of the Payroll Tax Deferral program that became available on September 1, 2020. Employers can choose to opt-in and are encouraged to speak to their employees regarding participation.
Regarding: Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster.
- On August 8, 2020, the President released the Executive Memorandum “Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster”.
- This Memorandum currently allows an Employer to defer the Employee Social Security Tax from wages paid between September 1, 2020 to December 31, 2020.
- Currently, the Employer is responsible for the management of the program and the ultimate remittance of the deferred taxes.
- The collection of this tax is suggested to be on Employee wages dated January 1, 2021 to April 30, 2021.
- Remittance of all deferred taxes per the memorandum is due April 30, 2021.
The President’s Memorandum encourages the Treasury to work on details for forgiveness, however, no details for forgiveness currently exist. We encourage our clients to carefully review the current information and consult with their Professional Advisors (Accounting-Legal-Human Resources) before making a decision to participate.
Education and documentation of Employee participation is recommended.
Payroll Vault is ready to support the administration of the program when the Employer decision has been made to participate in the program.
Next Steps: If after consulting with your adviser you decide to opt-in to the Program, please contact our office for our Client Authorization Form and Pricing. Nothing further needs to be done if you choose not to participate.
We look forward to supporting your decision and any questions you may have.