On Saturday, August 8, 2020, the President signed an Executive Order providing additional tax relief in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic. The Executive Order provides for the deferred withholding, deposit and payment of any qualified employee’s portion of Social Security taxes on wages or compensation paid between September 1, 2020 and December 31, 2020. Previous legislation (the CARES Act) already permits employers and self-employed individuals to defer their share of Social Security taxes through December 31, 2020.
Qualified employees include any employee whose bi-weekly wages or compensation is generally less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods. These amounts are deferred without any penalties, interest, additional amount, or addition to the tax.
Lastly, the Executive Order references the possibility of future legislation that would eliminate the obligation to pay these deferred employee Social Security taxes.
The IRS has yet to provide specific guidance on every tax situation relating to this relief, but our office is continuing to monitor all emergency federal and state tax measures and will be providing additional information and instruction, as necessary. Should you have any questions or concerns regarding your business or personal tax situation, please contact our office and we will advise you on such.
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