Sage is monitoring President Trump’s Executive Order deferring employee social security tax obligations in light of COVID-19 (effective September 1, 2020)

On Saturday, August 8, 2020, President Trump signed an Executive Order which directs Treasury Secretary Mnuchin to defer withholding, deposit, and payment of the tax imposed by 26 U.S.C. §3101(a), and much of the tax imposed by 26 U.S.C. §3201, as is attributable to the rate in effect under 26 U.S.C. §3101(a), on wages or compensation, as applicable, paid during the period of September 1, 2020, through December 31, 2020. To read the full order, click here.

The AICPA has requested guidance from the Treasury Department and the IRS on the payroll tax deferral, and Sage is monitoring this closely. To learn more about the guidance request, click here.

We are waiting on guidance and clarifications from the Treasury Department and the IRS before determining our next steps.

Parents
  • Any updates?

    I have clients calling asking about how to handle this.  Especially Union shops!!

  • Do you mean they actually want to do it?  The only clients that have contacted me are the ones who specifically want to make sure that anything Sage does will NOT assume that they want to do it - they're pretty adamant about it.

  • The one particular client wants to do this for the Union employees only.  Not sure if they can do that for just some employees and not others... or how to do this in Sage.

    My thoughts would be setup another tax profile (or set of tax profiles) to not calculate SS Taxes, but then how do we have the extra withheld next year?

  • Man, I hope those union employees understand about the "taking out twice as much next year" part...  That's "paying off the Christmas bills" time of the year.

  • I think the problem with setting up a new tax profile is the wages would be calculated as not taxable for FICA. They are still taxable, it’s just the tax is going to be deferred. Hoping Sage addresses this soon as the only way I can see at this point to implement this is to let the taxes calculate then go back into payroll data entry, pull up each entry, select the manual tax option and zero out the FICA withholding. Hopefully the new 941 will be editable so the deferred tax amount can be manually input. 

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  • I think the problem with setting up a new tax profile is the wages would be calculated as not taxable for FICA. They are still taxable, it’s just the tax is going to be deferred. Hoping Sage addresses this soon as the only way I can see at this point to implement this is to let the taxes calculate then go back into payroll data entry, pull up each entry, select the manual tax option and zero out the FICA withholding. Hopefully the new 941 will be editable so the deferred tax amount can be manually input. 

Children
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