President Trump has deferred the employee’s portion of Social Security taxes for numerous employees and has ordered the Secretary of the Treasury to provide guidance, and search for ways to eliminate the obligation to pay the deferred taxes.
This August 8th executive order directs Treasury Secretary Mnuchin to defer withholding, deposit, and payment of the tax imposed by Code Sec. 3101(a) (the 6.2% employee tax that provides for old-age, survivors and disability insurance under the Social Security tax) and so much of the tax imposed by Code Sec. 3201 (Railroad Retirement Tax) as is attributable to the rate in effect under Code Sec. 3101(a) , on wages or compensation, as applicable, paid period of September 1, 2020, through December 31, 2020.
The deferral is available with respect to any employee, the amount of whose wages or compensation, as applicable, payable during any biweekly pay period generally is less than $4,000, calculated on a pretax basis, or the equivalent amount with respect to other pay periods. The amounts will be deferred without any penalties, interest, additional amount, or addition to the tax.