You are here

Employee Payroll Tax Deferral + Key Due Dates

September 10, 2020

Update from RY CPA

Follow up to the President’s executive order (EO) to defer the employee portion of social security tax that began on September 1, 2020. The IRS issued guidance on August 28, 2020 that confirmed our reservation about enrolling our clients in this program. Here is what you should know:

  1. You have the option to not withhold and deposit your employee’s share of social security tax from their paychecks between September 1, 2020 through December 31, 2020.
  2. You are responsible for remitting these taxes to the IRS between January 1, 2021 through April 30, 2021 by doubling up on social security deductions from the employee’s paychecks during that period.
  3. Employees earning more than $4k biweekly ($104k annually) calculated on a pay-period-by-pay-period basis are not eligible.
  4. If the employee leaves, you’re responsible for arranging repayment from them for the amounts owed, otherwise you could be held personally liable for these payments because they’re considered trust fund taxes.   
  5. Penalties and interest will start to accrue beginning with May 1, 2021.
  6. There’s no guarantee that Congress will pass legislation to forgive the deferred taxes – especially since it’s not mentioned in the most recent bills proposed by the House and Senate.

If you have questions or comments, contact Raffi Yousefian at