September Looms—Should You Defer Payroll Tax?
Earlier this month, the President issued memoranda concerning, among other topics, employee and employer payroll tax and benefits for lost wages. At the time, the implications were that employees making under $104,000 would be allowed to defer their Social Security income taxes, beginning September 1, through the end of the year.
There were potential business-side implications, too—see our initial post to review the Executive Order and other memoranda.
As you know, September 1 looms: It's just a week away. With the entire business community awaiting Treasury Department guidance, we're all looking for answers right now. In particular, we don't know what percentage, if any, would be forgiven in the event that employers take on responsibility for a deferred payroll tax repayment. NAPEO, the National Association of Professional Employer Organizations, has also pointed out that there has been a large movement by business owners against this action for the issues it could potentially present.
Again, this period for deferral is set to begin Sept. 1. Again, we have no guidance from the Treasury. So, what should you do?
Our advice on August 8 was to stay the course, and that is our advice today. Continue to pay the employer side of Social Security tax and act as if there will be no forgiveness on any kind of deferral—because there has been no indication there will be.