On August 8, President Trump issued an executive order allowing employers to defer withholdings and payment of an employee’s portion of the Social Security tax for certain employees. The Treasury Department and Internal Revenue Service issued guidance for employers on how to properly carry out this order. Based on the news release from the IRS, it appears that an employer is not required to make the deferral available to employees that meet the wage eligibility, but has the option to do so.
AWC cautions cities to consider collecting an employee’s authorization in writing to defer Social Security tax collection as well as the employee’s written acknowledgement that the full amount of the tax will be deducted from the employee’s pay either at the end of the deferral period or in a final paycheck. City officials should consult with their attorney, and HR and payroll staff on the best way to implement this deferral.
MRSC recently put out information on this topic that is helpful.