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IRS issues guidance on payroll tax deferral

Written on Aug 28, 2020

The IRS late Friday issued guidance on the payroll tax deferral ordered Aug. 8 by President Trump. The notice allows employers to defer withholding on affected employees’ compensation during the last four months of 2020, then withhold those deferred amounts during the first four months of 2021.

The deferral is available with respect to any employee whose wages or compensation during any bi-weekly pay period generally are less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay cycles.

You can read Notice 2020-65 in its entirety here [PDF].