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Notice 2020-65: Relief with Respect to Employment Tax Deadlines Applicable to Employers Affected by the Ongoing Coronavirus (COVID-19) Disease 2019 Pandemic

Summary

Notice 2020-65 implements an August 8, 2020 Presidential Memorandum by postponing the withholding and payment of the employee share of social security tax, or the railroad retirement equivalent, on Applicable Wages. Applicable Wages are wages paid on a pay date from September 1, 2020 through December 31, 2020 where the amount for a bi-weekly pay period is less than $4,000, or the equivalent for other pay periods, tested pay period by pay period. Employers must withhold and pay the deferred taxes ratably from wages paid between January 1, 2021 and April 30, 2021, or interest, penalties and additions to tax begin to accrue on May 1, 2021. The notice says employers may make arrangements to otherwise collect the taxes from the employee if necessary, and that the deposit obligation is delayed because withholding is postponed.

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Full text

Part III - Administrative, Procedural, and Miscellaneous




Relief with Respect to Employment Tax Deadlines Applicable to Employers Affected by
the Ongoing Coronavirus (COVID-19) Disease 2019 Pandemic




Notice 2020-65


        On August 8, 2020, the President of the United States issued a Presidential

Memorandum directing the Secretary of the Treasury (Secretary) to use his authority

pursuant to section 7508A of the Internal Revenue Code (Code) to defer the

withholding, deposit, and payment of certain payroll tax obligations. 1 Accordingly, the

Secretary has determined that employers that are required to withhold and pay the

employee share of social security tax under section 3102(a) or the railroad retirement

tax equivalent under section 3202(a) are affected by the COVID-19 emergency for

purposes of the relief described in the Presidential Memorandum and this notice

(Affected Taxpayers). For Affected Taxpayers, the due date for the withholding and

payment 2 of the tax imposed by section 3101(a), and so much of the tax imposed by


1 The Presidential Memorandum is available at https://www.federalregister.gov/d/2020-17899.


2 The deposit obligation for employee social security tax does not arise until the tax is withheld.

Accordingly, by postponing the time for withholding the employee social security tax, the deposit
obligation is delayed by operation of the regulations. Thus, this notice does not separately postpone the
deposit obligation.

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section 3201 as is attributable to the rate in effect under section 3101(a), on Applicable

Wages, as defined herein, (collectively Applicable Taxes) is postponed until the period

beginning on January 1, 2021, and ending on April 30, 2021.


Applicable Wages

       For purposes of this notice, Applicable Wages means wages as defined in

section 3121(a) or compensation as defined in section 3231(e) 3 paid to an employee on

a pay date during the period beginning on September 1, 2020, and ending on

December 31, 2020, but only if the amount of such wages or compensation paid for a

bi-weekly pay period is less than the threshold amount of $4,000, or the equivalent

threshold amount with respect to other pay periods. The determination of Applicable

Wages is made on a pay period-by-pay period basis. If the amount of wages or

compensation payable to an employee for a pay period is less than the corresponding

pay period threshold amount, then that amount is considered Applicable Wages for the

pay period, and the relief provided in this notice applies to those wages or that

compensation paid to that employee for that pay period, irrespective of the amount of

wages or compensation paid to the employee for other pay periods.


Payment of Deferred Applicable Taxes

       An Affected Taxpayer must withhold and pay the total Applicable Taxes that the

Affected Taxpayer deferred under this notice ratably from wages and compensation



3 Because Applicable Wages are defined as wages as defined in section 3121(a) and compensation as

defined in section 3231(e), any amounts excluded from wages or compensation under these sections are
not included when determining Applicable Wages.
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paid between January 1, 2021 and April 30, 2021 or interest, penalties, and additions to

tax will begin to accrue on May 1, 2021, with respect to any unpaid Applicable Taxes. If

necessary, the Affected Taxpayer may make arrangements to otherwise collect the total

Applicable Taxes from the employee.


Drafting Information

       The principal authors of this notice are attorneys of the Office of Associate Chief

Counsel, Employee Plans, Exempt Organizations, and Employment Taxes, with the

participation of staff from other offices. For further information regarding the guidance

under this notice, please call the Notice 2020-65 Hotline at (202) 317-5436 (not a toll-

free number).




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