IRS 2020-65 Tax Deferral Information

IRS 2020-65 tax deferral

Sage KB Article 10663

On August 28, 2020, the US Department of Treasury and IRS issued Notice 2020-65 to guide employers on payroll tax relief from Trump’s August 8, 2020, Presidential Memorandum. To help Sage 300 CRE users track and report the deferral, Sage released Knowledgebase Article 10663.

Important verbiage from this article is as follows:

Article 106633 – Presidential Memorandum to Defer SOC Taxes

• From September 1, 2020, through December 31, 2020, the IRS allows employers to defer withholding, depositing, and paying the employee’s portion of Social Security tax for wages under $4,000 during a bi-weekly period.

The choice to defer withholding, deposit, and payment of the Social Security taxes is optional.”

• “Before you decide to defer payroll taxes, we recommend talking with your CPA or financial advisor. If you choose to defer payroll taxes, here are some ways you may protect yourself and your employees:
  • Make sure your employees understand that they must repay the deferred Social Security taxes. Repayments must be made between January 1 and April 30, 2021.
    • Note: Your organization can choose to withhold twice the normal amount during this period. Or you may use any other method you decide.
  • Have a repayment plan in place for all circumstances, including wage or personnel changes.”
• This knowledgebase article links to a Word document and a report design, both available for download.
  • The Word document provides setup and workflow instructions for tracking and reporting deferred Social Security tax for your employees. It also covers the amount recorded in a Deferred Deduction and Deferred Fringe, which you set up according to the instructions.
  • Install the Deferred SOC Tax Report.rpt report design on your system. It uses the deduction and fringe to track and report deferred Social Security taxes.
• Links to the full Presidential Memorandum order and full guidance for the IRS Notice 2020-65 and also provided in the knowledgebase article.

For assistance accessing the knowledgebase article and its attachments or with setting up your Sage system to track and report on deferred Social Security tax, please don’t hesitate to contact ETHOSystems.

More COVID-19 helpfor Sage 300 CRE: Tax Questions Related to COVIS-19 .