The IRS has issued Notice 2020-65, which implements President
Trump's August 8 memorandum calling for a deferral of
withholding of the employee portion of payroll taxes attributable
to certain wages. This deferral is elective by the
employer. The deferral is available for any pay period in
which the employee has wages paid to the employee from September 1,
2020 through December 31, 2020, but only if the wages for a
bi-weekly pay period don't exceed $4,000. For different
pay periods the maximum wages eligible for the deferral are
adjusted to be an equivalent amount.
The deferral is for withholding of the employee portion of FICA
taxes under section 3102 of the IRC and similar Railroad Retirement
taxes under section 3202 of the IRC. These amounts are
generally 6.2% of the wages paid to employee, so the deferral could
be as much as $248 per bi-weekly pay period, depending on the
employee's wages.
