In a Memorandum to the Secretary of the Treasury, President Trump directed that the Secretary use his authority to defer the withholding and payment of the employee’s share of certain Social Security taxes for the period September 1, 2020, through December 31, 2020, and that employers be permitted to pay the deferred taxes during the period beginning January 1, 2021, and ending April 30, 2021. On August 28, 2020, the Secretary followed the directive by issuing guidance in the form of IRS Notice 2020-65.
What the IRS Notice Says
According to the Notice, the taxes imposed by Section 3102(a) of the Internal Revenue Code on taxable wages paid (not earned) between September 1, 2020, and December 31, 2020, may be deferred. Importantly, though not explicitly stated, the Notice does not require an employer to defer the withholding and payment of the taxes. It simply extended the deadline for such withholding and payment. Continue reading “Deferral of Employee Social Security Taxes Not Even a Good Idea on Paper”