During this difficult time, DGC provides you with updates and resources here.
On August 8, 2020, President Trump signed an executive memorandum that defers an employee’s portion of Social Security and Medicare taxes from September 1, 2020 through December 31, 2020. At this point, the taxes are just deferred, meaning they will still have to be paid at a later date. However, the executive action directs U.S. Treasury Secretary Steven Mnuchin to “explore avenues, including legislation, to eliminate the obligation to pay the taxes.”
The exact impact on employers and employees is still unknown. Some experts believe there may be legal challenges to this executive action.
The payroll tax deferral will be available for “any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000.” The deferral will be calculated on a pretax basis or the equivalent amount with respect to other pay periods. Plus, the amounts will be deferred without any penalties, interest, additional amount or addition to the tax.
We are still awaiting more details concerning payroll tax deferral. Secretary Mnuchin has been instructed to provide additional guidance and employers cannot act on the deferral until that guidance is announced. It’s also possible Congress could take action. We will continue to monitor the situation and keep you updated.
If you have questions about payroll tax deferrals and how they might impact you, please reach out to a member of your DGC client service team or Stephen Minson, CPA, MST at 781-937-5120 / email@example.com. You can also visit our coronavirus web page at dgccpa.com/coronavirus which is frequently updated with resources to help you deal with the impact of the coronavirus on you and your business.
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