Starting September 1, 2020, your employer doesn’t have to withhold the 6.2% Social Security tax if you earn $4,000 or less for a bi-weekly pay period.
This tax break runs through the end of 2020. However, you will need to pay the money back during the first four months of 2021.
Employers aren’t required to suspend the collection and payment of the 6.2% Social Security payroll tax. The deferral of Social Security tax is intended to be voluntary and is up to the employer, not the employee.
Many employers are reluctant to follow the President’s plan since they are concerned about potentially being stuck paying the deferred tax themselves should an employee leave or double taxing employees in 2021 to pay the taxes back.
Stay tuned as the Treasury will release more guidance in the near future.