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PAYROLL TAX DEFERRAL EXTENSION – DEADLINES and RESPONSIBILITIES

On August 8, 2020, President Donald Trump signed an Executive Order directing the Treasury Department to temporarily defer the withholding, deposit, and payment of the employee’s share of Social Security taxes on wages or compensation paid by employers from September 1, 2020 through December 31, 2020. Under IRS guidelines, required these deferred taxes to be repaid by additional withholding of the employee portion of Social Security Taxes between January 1, 2021 and April 30, 2021. However, on December 27, 2020, President Trump signs the Consolidated Appropriations Act of 2021, whereby affected individuals now have until December 31, 2021, instead of April 30, 2021, to repay the deferred taxes.

For any employee that did withhold during the applicable 2020 period, the Employer bears the responsibility to withhold the employee’s share from wages and deposit the deferred taxes on behalf of the employee. We recommend any employer with affected employees communicate clearly with employees to effectively manage employee expectations and their repayment obligations.

To find out more about what we’ve done in the field of employment, visit our practices pages.