Treasury Instructed to Delay Social Security Withholding

Treasury Instructed to Delay Social Security Withholding

Beginning this September through the end of 2020, employers may not be the only ones getting temporary relief from their social security tax obligation.

In response to the continued impact of COVID-19, President Trump signed an Executive Order instructing the Treasury to defer withholding, deposit and payment of the 6.2% employee portion of social security tax imposed under 26 U.S.C. 3101(a) for wages paid between September 1, 2020 through December 31, 2020.

This deferral would be offered with no penalties or interest and would be available to any employee with wages and compensation generally totaling less than $4,000 (pre-tax) during any biweekly pay period, or the equivalent amount in another pay period.

Under the CARES Act, employers already received a deferral of their portion of the social security tax through the end of 2020.

The new order directs Treasury Secretary Mnuchin to provide guidance on the implementation of the deferral and to explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred under this Executive Order.

We’re Here to Help

Until further guidance is made available, we understand employers and employees face many uncertainties, such as the timing of the withholding, significant payment amounts due at the end of the deferral period, cost of payroll modifications, reporting requirements, and the question of who is responsible for the deferred taxes if an employee leaves the company.

Grassi’s Tax Services advisors are here to keep you informed as Treasury guidance is released and help you navigate these changes with confidence.


Jeffrey G. Cohen Jeffrey G. Cohen, CPA is the Partner-in-Charge of Tax Services at Grassi. With over 30 years of experience, Jeff specializes in serving companies within the Manufacturing and Distribution Industry, with an emphasis on the Food & Beverage and Pharmaceutical sectors. A leading tax expert in the New York Metropolitan area, Jeff has enabled his clients to realize significant tax savings through proper Income and... Read full bio

Shashi Singal Shashi Singal is a Principal at Grassi and brings over 18 years of diversified tax and accounting experience to the firm. Her expertise lies in review of tax returns, research projects, tax planning and projections, assisting with mergers, acquisitions and corporate re-structuring. Shashi works with clients primarily in the manufacturing & distribution, wholesale and retail industries, law firms, architecture and engineering firms, real estate... Read full bio