Level 5

Question

Deferral of (payroll) taxes

Forum|Forum|5 years ago
August 26, 2020
4 replies
16 views

Although not entirely having anything to do with income tax, does anyone know the official status of the signing of the Memorandum by President Trump that defers certain payroll tax obligations from 9/1 - 12/31/20. Is it going to actually be allowed and what is the protocol as of today??

Lacerte Tax

This topic has been closed for replies.

T

TaxGuyBill

Level 15

Duplicate post:

https://proconnect.intuit.com/community/coronavirus/discussion/presidential-memoranda-on-deferring-payroll-tax/00/98605

IRonMaN

Level 15

Just curious - did you post twice or is the system having a case of the hiccups?

Slava Ukraini!

1

11BusterAuthor

Level 5

I posted in the COVID community also as nobody seems to know the current status, although they know what the issue involves.

IRonMaN

Level 15

It's in limbo.

Slava Ukraini!

BobKamman

Level 15

The U.S. Treasury Department still has yet to tell companies how to handle President Trump’s order delaying the due date for employee payroll taxes, leaving major employers such as Walmart Inc. in the lurch.

It’s been two weeks since Trump issued his directive deferring the deadline to pay worker’s portions of Social Security taxes from Sept. 1 to the end of the year. But employers, which are responsible for submitting those payments to the Internal Revenue Service, are waiting to hear from the agency on how any tax bill would be handled when it comes due later.

https://www.latimes.com/business/story/2020-08-25/trump-payroll-tax-deferral-irs-guidance

sjrcpa

Level 15

Leaving nonmajor employers in the lurch, too.

The more I know the more I don’t know.

1

11BusterAuthor

Level 5

So it would appear to me, per IRS Notice 2020-65 reading, employers ARE required to defer withholding (and payment thereof) of employee portion of OASDI if wages paid between September 1 - December 31, 2020, are under the applicable wage limit. Employers/employees have no choice. Is that everyone is reading?

qbteachmt

Level 15

"So it would appear to me, per IRS Notice 2020-65 reading, employers ARE required to defer withholding (and payment thereof) of employee portion of OASDI if wages paid between September 1 - December 31, 2020, are under the applicable wage limit. Employers/employees have no choice. Is that everyone is reading?"

Nope.

It states only that the Employer is considered the affected taxpayer, and the deferral has to be computed on specific wage limits and repaid by a specific timeframe, and how it can be collected is specifically not stated.

Employers apparently have the choice to participate or not.

And it doesn't address the Employer share; yet, they are identified as the affected taxpayer.

It's still a big mess.

Employees get to do what that employer had decided to do, based on what qualifies.

Don't yell at us; we're volunteers

BobKamman

Level 15

@qbteachmt And it doesn't address the Employer share

The employer share (the 6.2%, not the 1.45%) was already deferred the way it has to be done, by legislation. See Section 2302 of the CARES Act.

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