Payroll tax exective order

[Burke]

From what I am reading in the press, hardly any employers (including some very large ones) are implementing this suspension.

[rbynaker]

I thought this might be relevant info so I'm tacking it onto this older thread.

https://www.irs.gov/forms-pubs/form-w-2-reporting-of-employee-social-security-tax-deferred-under-notice-2020-65

From my IRS e-News this week, "In short, the 2020 Form W-2 must reflect only the amount of Social Security tax actually withheld from 2020 wages, and a Form W-2c will need to be issued when the 2020 Social Security tax is withheld in 2021."

Rick

[TaxGuyBill]

Yet another reason why employers would not want to suspend the Social Security tax. That sounds like a nightmare. Extra work (and cost) for the employer and lots of confusion for the employees that receive the W-2c.

[Burke]

See also the recent Taxbook Update Notice which discusses how to report this.

[Rapid Robert]

I didn't say you could wait until April to deposit taxes that were withheld in January. I said you don't have to pay the tax until April 30th. Since the pay period for the withholding was during the deferral period, the actual withholding can take place at anytime prior to April 30th. The comment was that it had to be withheld ratably. No, it just needs to be withheld and paid over to the government sometime before May 1 to avoid penalties and interest, assuming you deposit the tax timely once withheld. So in theory, you could withhold (or collect) the entire deferred tax on April 30, 2021 and deposit it with the government on that same day and avoid the penalty.

So now the deadline for doing the withholding without penalty is all the way until 12/31/2021, and of course the Form W-2c wouldn't be issued until after that date as well. And more time for employees to leave the job before the employer catches up on all the withholding. What a lot of useless busywork for the SSA, payroll service providers, and IRS, especially given that if they do choose to use the ratable approach, they have to reprogram everything again.