US President Trump has ordered that the employee share of payroll taxes should be deferred until the end of the year. President Trump has directed the Secretary of the US Treasury to take the necessary steps to defer the withholding, deposit, and payment of the employee share of payroll taxes (i.e. the 6.20% FICA tax) from 1 September 2020 until the end of the year, as a further response to the economic impact of the COVID-19 pandemic.
The deferral would be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than USD 4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods.
The Treasury Department is expected to issue guidance to implement the measure. In addition, the Treasury Department has been directed to explore avenues, including Congressional legislation, to forgive the taxes deferred.
This Presidential order follows measures enacted under the CARES Act that permit deferral of the employer share of payroll taxes for the period beginning on 27 March 2020 and ending on 31 December 2020.