A: Under the President’s Executive Order, the Secretary of Treasury is directed to use his authority to defer withholding, deposit and payment of the 6.2% Social Security Tax or FICA and the 1.45% Medicare Tax from September 1, 2020 through December 31, 2020 for individual workers with wages under the annual equivalent of $104,000.
The amounts deferred will not face “penalties, interest, additional amount, or addition to the tax”. The Secretary of the Treasury shall issue guidance to implement this memorandum
The order also directed the Secretary of Treasury to “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred”.
Employers should actively monitor the upcoming guidance from the Department of Treasury as well as assess the risk of possibly having to recoup these taxes.
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