On 8/28/2020, the Treasury Department issued guidance on President Trump’s payroll tax holiday Executive Order, dated 8/8/2020. The Executive Order defers the 6.2% tax employees pay toward Social Security. The Treasury notice will allow but not require employers to postpone these payroll taxes from 9/1/20 through 12/31/20. The deferred taxes would be required to be remitted between 1/1/21 through 4/30/21. If the deferred taxes are not paid by 4/30/21, then penalties, interest and other taxes will apply and begin to accrue on 5/1/21. The tax holiday applies only to employees with wages below $4,000 bi-weekly salary (annualized salary $104,000 per year). Employers will be required to withhold and pay back any deferred taxes. Taking advantage of this tax deferral is optional for employers. Many are expected to opt out of participation to avoid having to deal with implementation of complex tax deferrals and withholding double tax amounts from employees’ paychecks next year. According to the treasury’s guidance, the employer would be responsible to pay back deferred taxes – even if the employee for whom taxes were deferred is no longer employed by the company. Stay tuned for further IRS and Treasury guidance on this issue, as implementation questions surrounding this novel program are sure to arise.