On Saturday, August 8, 2020, the President issued three memoranda and one Executive Order dealing with payroll taxes, student loans, evictions, and benefits for lost wages. Below is a summary of the payroll tax memorandum prepared by Randy Hardock of Davis & Harman. The memorandum directs the Secretary of the Treasury to implement a delay of certain employees’ obligations to pay certain Social Security taxes. The Payroll tax provision, according to the Executive Order, applies to the period September 1, 2020, through December 31, 2020.
On August 28, the IRS issued guidance on the implementation of the payroll tax deferral. It can be found here. The IRS has confirmed that the payroll tax deferral for employees is optional, according to a report in Bloomberg Government. “Employers may, but are not required, to utilize the relief,” according to Kelly Morrison-Lee, an attorney with the Internal Revenue Service, said during the agency’s monthly payroll industry teleconference.
Summary of Payroll Tax Memorandum
Preliminary Summary of IRS Guidance
Analysis of Risks to CPEOs and PEOs
House Way & Means Committee Alert on Payroll Tax Deferral
US Chamber of Commerce Summary of Payroll Tax Deferral Guidance
NAPEO Letter to the IRS