An executive order signed by President Trump allows the employee portion of Social Security Taxes to be deffered starting September 1 – December 31, 2020.
What this means is less tax now, but more tax later.
This Tax Holiday will result in double social security taxes coming out of Americans checks in 2021. Not very ideal, unless congress decides to forgive the tax!
As of right now we recommend that employers continue to withhold the usual taxes since the money will be owed back anyway.
The IRS released guidance specifying that deferred payroll taxes must be repaid between Jan. 1, and April 30, 2021. Any tax that isn’t repaid within that window will be subject to interest and penalties.
Making smaller payments over time may be a lot more manageable than being taxed double the amount in 2021. The last thing you want is accruing interest and late penalty fees.
Our small business payroll service makes complex payroll tasks simple, so you can spend your time where it’s needed! Call us today and we can get you started! 508-563-2218 or fill out a “Let’s Talk” Form on our website and a team member will reach out to you!
