The IRS recently issued much-anticipated guidance on the payroll tax deferral ordered in a presidential memorandum on Aug. 8.
Notice 2020-65 allows employers to defer withholding on affected employees’ compensation during the last four months of 2020 and then withhold those deferred amounts during the first four months of 2021.
Under the guidance, employers can defer the withholding, deposit and payment of certain payroll taxes on wages paid from Sept. 1 through Dec. 31, 2020.
The deferral applies to any employee whose pretax wages or compensation during any biweekly pay period generally is less than $4,000. Learn more.