On August 8, 2020, President Trump signed a Memorandum on Deferring Payroll Tax Obligations in Light of Ongoing COVID-19 Disaster for the Secretary of the Treasury (the “Payroll Tax Memo”). The Payroll Tax Memo notes that President Trump previously declared the COVID-19 pandemic an emergency and that further action is needed to support working Americans during the pandemic. The Payroll Tax Memo directs the Secretary of the Treasury to use his authority (under Section 7508A of the Internal Revenue Code) to defer withholding, deposit, and payment of certain Federal Insurance Contribution Act or “FICA” taxes owed by certain employees for wages paid between September 1, 2020 and December 31, 2020 (the “Deferral Period”), subject to the following conditions:
- The deferral is only permitted for employees whose bi-weekly pre-tax compensation is less than $4,000 (or the equivalent amount with respect to other regular pay periods); and
- Amounts deferred shall be deferred without any penalties, interest, additional amount or addition to the tax.
Continue Reading President Trump Signs Memorandum on Deferring Payroll Tax Obligations