Payroll Tax Deferral: 09/01/2020 – 12/31/2020

Payroll Tax Deferral: 09/01/2020 – 12/31/2020

The Internal Revenue Service has issued guidance on 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 (linked below) applies to wages paid from September 1, 2020, through December 31, 2020. 

The employee Social Security tax deferral applies to any employee whose pretax wages 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 with pretax wages of $4,000 or above for a bi-weekly pay period.

Between January 1, 2021 and April 30, 2021, employers must ratably withhold the deferred Social Security from employees and pay it in with current withholding or interest and penalties will apply.

Should you have any questions, please do not hesitate to contact one of our tax professionals at Bormel, Grice & Huyett, P.A.

 

Notice 2020-65 can be found here: https://www.irs.gov/pub/irs-drop/n-20-65.pdf

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The Cultural Alliance of Greater Washington has worked with Bormel, Grice & Huyett, P.A., since 1988. Their knowledge of the arts and the arts community make their services invaluable. They can translate accounting terminology into a comprehensive language. For many organizations, the accounting firm of Bormel, Grice & Huyett provides the financial "information bridge." We whole-heartedly recommend Bormel, Grice & Huyett, excellent accountants who care about our arts organizations.
Jennifer Cover Payne, Executive Director, Cultural Alliance of Greater Washington

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