Sage has completed our review of the August 8 Executive Order and the subsequent guidance from the Treasury related to deferring social security tax withholding.

Companies have the option to participate. Before your company decides whether to defer social security taxes, we recommend talking with your CPA or financial advisor.

If your company decides to defer these taxes, note that:

• The deferral period is September 1, 2020 through December 31, 2020.
• The deferred taxes must be paid back between January 1, 2021 and April 30, 2021.

To protect yourself and your employees if you implement this deferral:

• Ensure your employees understand that they must pay back the deferred Social Security taxes between January 1 and April 30, 2021.
• Decide how to pay back the deferred amount, such as by withholding twice the normal amount between January 1 and April 30, 2021 from employee paychecks.

Note that the repayment plan should cover all circumstances, such as when an employee leaves the company or when an employee earns more or less during the repayment period.

If you use Sage 100 Contractor U.S. Payroll, we have developed steps that you can use. See Sage Knowledgebase article 106684 for the suggested setup and workflow. The article includes steps to recover the withholding that was deferred in 2020

Sage is monitoring changes to Form 941 and Form W-2 to report the deferred taxes. We will inform you when the IRS finalizes these changes.

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