IRS COVID-19 Payroll Tax Deferral Guidance

Early last month, President Trump signed an executive order directing the secretary of the treasury to allow employers to defer the withholding, deposit and payment of a certain portion of social security taxes in light of the ongoing COVID-19 pandemic. The IRS has issued guidance implementing the president’s order. However, Notice 2020-26 still leaves employers responsible for collecting the tax from employees and for interest and penalties if the employers are unable to collect the tax after the deferral period. As a result, employers should carefully consider whether it is prudent to participate in the program. As always, NECA contractors are encouraged to seek competent local legal, tax and accounting counsel for specific questions and concerns related to the deferral of payroll taxes. Click here to read the full NECA Legal Alert.