It may also be worth considering the potential implications of not implementing the payroll tax deferral. Presumably, if an employer finds itself in that bind, the employer is obligated to pay the tax. No relief is provided in Notice 2020-65 to an employer that defers payment of an employee’s social security tax if the employer cannot collect the deferred taxes later. If an employer fails to do so, the employer may be held liable for the taxes not withheld, as well as various types of penalties. For instance, the Internal Revenue Code Section 3102 generally obligates an employer to withhold an employee’s social security taxes. Interest and penalties on the deferred tax will begin to accrue on May 1, 2021.Ĭounties who choose to implement the payroll tax deferral should consider the potential implications.Barring a legislative change, the deferred taxes must be recouped from applicable employees beginning Januthrough April 30, 2021.The deferral is applicable to employees who have a bi-weekly pre-tax wage of less than $4,000, or the equivalent threshold amount with respect to other pay periods.The deferral applies to the employee portion of the Social Security payroll tax for applicable wages paid to an employee between Septemand December 31, 2020.Listed below are some highlights of the guidance: The Secretary issued that guidance on Aug(Notice 2020-65). On AugPresident Trump issued a Presidential Memorandum directing the Secretary of the Treasury to develop guidance on allowing employers to defer the withholding, deposit, and payment of certain payroll taxes during the last four months of 2020 and then recoup those deferred amounts during the first four months of 2021.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |