On Aug. 28, 2020, the IRS issued Notice 2020-65, allowing employers to temporarily defer withholding the employee’s portion of Social Security payroll taxes for pay periods starting Sept. 1 through Dec. 31, 2020, as directed by an Executive Order issued by President Donald Trump.
Unless Congress passes additional legislation forgiving the repayment of this tax deferral, employees will repay the taxes by doubling the employee's Social Security tax paycheck withholding to 12.4 percent during the first four months of 2021.
As a result, KNA Solutions has decided not to stop the withholding of Social Security taxes from employees’ pay at this time.
This decision was made due to the administrative challenges of implementing changes to ADP’s payroll software on such short notice, coupled with feedback from employees with concerns about the significant reduction in take-home pay that would occur during the first four months of 2021 (during the payback period).
In the event that:
Congress passes legislation forgiving the tax repayment, or
the Treasury Department issues guidance regarding the ability of employees to make individual choices regarding participation in this tax deferral
KNA Solutions will reassess this decision, and employees will be promptly notified of changes, if any.
Should you have any further questions, please submit an inquiry to the KNA HR team via this link: http://bit.ly/KNA-HR
The KNA Leadership Team