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September 1 Payroll Tax Deferral

On August 8th, President Trump declared that he was deferring the collection of the employee portion of FICA, a 6.2% payroll tax that funds retirement and disability payments to American workers. However, this amount would have to be repaid by workers in early 2021. Furthermore, if an employee leaves, the employer would be required to pay this amount.

IRS guidance states that employers are not required to participate. It is unclear whether individual employees will have the opportunity to opt in or out of this deferral. Multiple IRS forms (941, W-2, W-3, 1040) will have to be amended in order to accommodate the complexity of this deferral.

A longer update with references is posted here.

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