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.

  • UPDATE: As of today, August 25th, the IRS has not released any guidance for this payroll tax deferral.

    Additionally, the National Payroll Reporting Consortium (NPRC) and American Payroll Association (APA) have sent recommendations to Treasury and IRS. To learn more about these, click NPRC Statement on Employee Social Security Tax Deferral and NPRC and APA Offer Recommendations to Treasury and IRS re Social Security Tax Deferrals

    We are continuing to monitor this closely.

    This post will be updated when more information is known.

  • in reply to Gina Weathersby

    Gina - it looks like the IRS has issued something late Friday.  The Journal of Accountancy published an article putting it in plain speak.   Looking forward to guidance on how to process in Sage 100.


  • UPDATE: Guidance for the recent Executive Order was received late Friday. Sage is reviewing to determine next steps. Read about the guidance here:

    We are aware that the IRS posted a draft revision of Form 941 and we are reviewing it as well. The Form 941 draft is posted here:  

  • There remains significant confusion surrounding this issue. Some political pundits claim the President’s Memo is a political strategy designed to force a more comprehensive deal on economic reforms and stimulus with Congress upsers portal

  • Any updates?

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

  • in reply to Dawn Heaton

    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.

  • in reply to bethbowers

    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?

  • in reply to Dawn Heaton

    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.

  • in reply to Dawn Heaton

    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. 

  • in reply to bethbowers

    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?