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 a company decides to participate:

• The deferral would cover the employee share of social security taxes for employees earning less than $4,000 during a bi-weekly pay period or equivalent.
• 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.

If your company decides to defer these taxes, to protect yourself and your employees when implementing the deferral:

• Ensure your employees understand that the deferred Social Security taxes must be paid back between January 1 and April 30, 2021.
• Decide how the deferred amount will be paid back, 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 300 CRE U.S. Payroll, we have developed steps that you can use. See Sage Knowledgebase article 106633 for the suggested setup and workflow. This article includes a report that helps you keep a running total of the deferred social security tax for each employee, which can be added to the check format so that the employee is aware of the amount of deferred taxes.

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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