The Department of the Treasury has issued guidance on the August 8, 2020 Presidential Executive Order that defers an employer’s obligation to withhold, deposit, and pay the employee’s portion of the payroll tax on wages earned between September 1, 2020 and December 31, 2020. The order, which does not require employers to withhold this amount, generally applies to employees who earn less than $104,000 per year ($4,000 per bi-weekly pay period). If employers withhold this amount, it would become due to the IRS during the period January 1, 2021 to April 30, 2021, and employers are permitted to “make arrangements to otherwise collect the total Applicable Taxes from the employee.”
The U.S. Chamber of Commerce has issued a memorandum explaining the employee tax holiday in greater detail. Dealers are strongly encouraged to discuss this matter with their tax advisor.
Chairman, NADA Regulatory Affairs Committee