WASHINGTON, D.C. — The U.S. Department of the Treasury released the following statement on the funding of the Social Security Trust Funds and Payroll Tax Deferral:
“An August 8, 2020, Presidential Memorandum directed the Secretary of the Treasury to use his authority to allow employers to defer the withholding, deposit, and payment of certain payroll taxes for employees who are paid less than $4,000 on a bi-weekly basis.
“The payroll taxes eligible for deferral are those imposed on wages paid between September 1, 2020 and December 31, 2020. Under guidance issued by the Treasury Department and the Internal Revenue Service, any deferred payroll taxes must be repaid no later than April 30, 2021.
“The Treasury Department will continue to make regular transfers to the Social Security Trust Funds based on an annual schedule developed by Treasury and the Social Security Administration earlier this year.
“Treasury does not have reliable information to revise that transfer schedule because employers’ regular tax payments to Treasury are not differentiated between income taxes and payroll taxes, and the payroll tax deferral is elective.
“We do not expect deferral to impact the Social Security Trust Funds because the deferral is temporary and all deferred taxes must be repaid. Repayment of the deferred taxes must start no later than January 1, 2021, and all deferred taxes must be fully repaid by April 30, 2021.
“The deferral will have no impact whatsoever on current or future payments received by Social Security recipients, and the Trump Administration remains fully committed to the integrity of the Social Security Trust Funds.”
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