What is the deferral?
- The deferral is on the employee share (6.2%) of Social Security Payroll tax
- The deferral period is from September 1,2020- Dec 31,2020
- This is only a deferral; the guidance does not indicate taxes will be forgiven
What determines if an employee is eligible for the deferral?
- Taxes may only be deferred for employees whose applicable wages are less than $4,000 on a bi-weekly pay period
- The deferral eligibility is based on a pay period by pay period basis
What’s the role of the Employer?
- Employers are not required to offer the payroll tax deferral to employees.
- Employers are responsible for collecting and paying back any deferred taxes. Payments would be due between September 1, 2021 and April 30, 2021.
- Penalties and interest on unpaid amounts begin accruing May 1, 2021.
- It will remain the employer’s responsibility even if they are unable to collect the deferred amount from their employee(s).