About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (August 24, 2020)

handle is hein.crs/govdbmv0001 and id is 1 raw text is: Gongrsssoa Research Service COVID-19: Presidential Order Deferring Individual Payroll Taxes August 24, 2020 On August 8, 2020, President Trump issued a presidentialmemorandum ordering the deferral of individual payroll tax obligations from September 1, 2020, through December 31, 2020. The deferral is for employees with biweekly compensation of generally less than $4,000. The memorandum directs the Secretary of the Treasury to issue guidance to implement this policy. This Insight discusses the individual payroll tax deferral outlined in the memorandum, compares this order to the business payroll tax deferral provided in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136), and addresses questions related to the effect of the deferral on the Social Security trust funds. What individual payroll taxes are affected by the order? The presidential memorandum orders deferred collection and payments of the employee portion of the Old Age, Survivors, and Disability Insurance (OASDI) payroll tax, also known as the Social Security payroll tax. The Social Security trust funds are financed by a 12.4% payroll tax on wages up to the taxable earnings base ($ 137,700 in 2020). The tax is split equally between employers and employees, with each paying 6.2%. Self-employed individuals pay both the employer and the employee share, or 12.4%. The deferral is applicable to employees with less than $4,000 in wages during the biweekly pay period (or equivalent amounts with respect to other pay periods). The deferral applies to the railroad retirement tax attributable to the individual Social Security tax. The memorandum does not specify whether the deferral applies to self-employed individuals. How does the order affect payroll tax collections? Employers collect the employee portion of the tax by deducting the tax from wages when wages are paid. Employers typically deposit payroll taxes with the Internal Revenue Service (IRS) semiweekly or monthly, and report employment taxes paid on quarterly federal tax returns filed no later than 30 days after the end of the calendar quarter. Some employers with small payrolls may file annually. Decisions Congressional ResearchService https://crsreports.congress.gov INI 1488 CRS INSIGHT Prepared forMenbers and onmmittees of Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most