President Trump issued an executive order to defer the 6.2% tax employees pay toward Social Security from Sept. 1 until Dec. 31. This is only a deferral — not forgiveness of the tax owed.
The deferral applies to any employee whose pretax wages or compensation during any bi-weekly pay period generally is less than $4,000. The notice requires affected employers to withhold and pay the deferred taxes from wages and compensation paid during the period between Jan. 1, 2021, and April 30, 2021.
The taxes must be paid on April 30th. Penalties, interest, and other taxes will accrue starting May 1st.
Employees will have a temporary boost in their tax home pay for the remainder of the year. However, if you will see smaller paychecks next year as employers will withhold the tax owed to the IRS.