President Trump issued a Presidential Memorandum on 8/8/20 directing the Treasury Secretary to defer certain payroll tax obligations of certain American workers. Employers were immediately faced with the decision of whether to defer taxes, or continue to withhold as usual. The primary reason for the hesitation was the unanswered questions regarding deferral, key among them being what happens when an employee resigns (or is terminated) before the end of the year. This Blog Post seeks to outline, as of the time of this writing, what is known, and not known, about the payroll tax deferral and what business owners should consider before deciding to move forward . . . or not. The Presidential Memorandum The Presidential Memorandum states that the Treasury Secretary may defer the withholding, deposit,...

On August 8, 2020, President Trump signed four executive actions, including a Presidential Memorandum to defer the employee’s portion of Social Security taxes for some people. These actions were taken in an effort to offer more relief due to the COVID-19 pandemic. The action only defers the taxes, which means they’ll have to be paid in the future. However, the action directs the U.S. Treasury Secretary to “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.” Legislative history On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act. A short time later, President Trump signed into law the Coronavirus, Aid, Relief and Economic Security (CARES) Act. Both laws contain economic relief provisions for employers...