“If you deferred the employee portion of Social Security tax under Notice 2020-65, when reporting total Social Security wages paid to an employee on Form W-2, Wage and Tax Statement, include any wages for which you deferred withholding and payment of employee Social Security tax in box 3 (Social security wages) and/or box 7 (Social security tips). 29, 2020, instructions are given to employers on how to report the deferred Social Security wages on Form W-2: In new guidance released by the IRS on Oct. A valid question, considering in the initial guidance released just a few days before the start of the deferral period, employers were seemingly assigned the responsibility of repaying and recouping the deferred tax dollars, according to the Journal of Accountancy 2. In our previous coverage, we examined who was responsible for repaying the payroll taxes, which fund Social Security, and how financial advisors might help business owners assess their options. Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, employers had already been granted the ability to defer their share of payroll taxes, but as a second stimulus package failed to make headway through congress, the memorandum set forth the option for employers to also defer an employee’s 6.2% payroll tax obligation 1.Īs a deferral, those that opt-in to the program will have to eventually repay the unpaid taxes after the deferral period which is Sept. On August 8, a Presidential Memorandum allowed for employers to defer certain employee payroll taxes.
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