Insights
Client Alert: President Trump Issues Executive Order on Payroll Tax Deferral
on September 1, 2020
Per President Trump’s Executive Order and subsequent guidance from the Treasury (Notice 2020-65), companies can stop withholding employees' payroll taxes starting September 1, 2020. Employer participation is voluntary. Employees cannot choose whether or not to delay withholding.
Payment of those taxes is postponed until January 2021, at which point employers are required to start collecting back what is owed, perhaps by withholding double the amount they usually take until May.
The deferral applies only to people who earn up to $4,000 on a biweekly basis, and less than $104,000 annually.
RISK - Employers will face liability, including penalties and interest if the delayed withholding amount is not fully repaid by May 1, 2021.
(Potential) REWARD - There is a chance that Congress (not the President) will waive any tax due in 2021, and repayment of the delayed taxes will not be required.
Brouse McDowell’s Tax Attorneys guide clients through business or personal tax implications and help them take advantage of tax strategies positioning them for optimal financial success. Please contact us for more information or to schedule an evaluation.