IRS Issues Guidance on Payroll Tax Deferrals, but Questions Remain
This Bulletin is brought to you by AHLA’s Tax and Finance Practice Group.
- September 24, 2020
- Morgan L. Kreiser , Baird Holm LLP
Late Friday, August 28, the Internal Revenue Service (IRS) issued highly anticipated guidance on the payroll tax deferral ordered by President Trump in an August 8 Executive Order. The guidance, published in IRS Notice 2020-65, postpones the due date for withholding and payment of an employee’s portion of FICA taxes (6.2%). Despite hopes that the IRS would eliminate the payroll tax burden, the IRS’ guidance instead confirms that the obligation to withhold and pay the payroll tax is only deferred to 2021. A complete forgiveness of the payroll tax obligation would have to come from Congress.
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