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.

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  • 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. 

  • There may be some in this thread that are forgetting about the possibility of the entire deferral being forgiven. Our popularity-seeking congress members may not be willing to force the "double" deduction pay back unless they want to be seen as intentionally punitive (whether they are or not). Hey, in this political climate, anything can happen!

    BUT all of that is completely irrelevant. If the law allows for it, the decision to take advantage of it lies with the employee (not the employer or the software developer) and Sage should be making the necessary revisions to its programs, pronto! Not just "monitoring the situation." Employers are paying for this service and should be able to process payroll in this manner for the employees that want it. If the funds have to be paid back later, then they pay it back later. And if that payback must be done through another payroll modification, as seems likely, then Sage would be wise to see this coming and be proactive about it.

    I am working on my second payroll since this was put into place... any word when this programming will be complete?

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  • There may be some in this thread that are forgetting about the possibility of the entire deferral being forgiven. Our popularity-seeking congress members may not be willing to force the "double" deduction pay back unless they want to be seen as intentionally punitive (whether they are or not). Hey, in this political climate, anything can happen!

    BUT all of that is completely irrelevant. If the law allows for it, the decision to take advantage of it lies with the employee (not the employer or the software developer) and Sage should be making the necessary revisions to its programs, pronto! Not just "monitoring the situation." Employers are paying for this service and should be able to process payroll in this manner for the employees that want it. If the funds have to be paid back later, then they pay it back later. And if that payback must be done through another payroll modification, as seems likely, then Sage would be wise to see this coming and be proactive about it.

    I am working on my second payroll since this was put into place... any word when this programming will be complete?

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