In this episode, we touch base with Ed Karl, the AICPA’s vice president–Tax Policy & Advocacy, to discuss questions the AICPA Tax Executive Committee has raised in official comments to Treasury and the IRS concerning President Donald Trump’s Aug. 8 memorandum ordering Treasury to defer the withholding, deposit, and payment of payroll taxes imposed by Sec. 3101(a) — better known as the employee portion of Social Security tax, currently 6.2% of covered wages and compensation — and a comparable rate of tax under Sec. 3201 — that’s the Railroad Retirement tax — for Sept. 1, 2020, through the end of the year. We’ll explore the range of issues that Treasury and the IRS face as they implement this order and what it all could mean for employers and employees.

What you’ll learn from this episode:

• Who is — or might be — eligible to make the tax deferral, and why employees should be required to make an affirmative election to do so.
• The range of types of wages or compensation that might (or might not) be counted toward the eligibility ceiling of $4,000 biweekly (or equivalent amount and pay period).
• What employers might have to do to make the deferral available and then report the amount deferred.
• If the taxes are not forgiven (the presidential memorandum instructs Treasury to “explore avenues, including legislation” to waive the taxes altogether), how and when they might be required to be paid.

Play the episode below or read the edited transcript:

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the pandemic, visit the JofA’s coronavirus resources page.

For tax-related resources, visit the AICPA’s COVID-19: Tax resources page.

To comment on this podcast or to suggest an idea for another podcast, contact Paul Bonner, a JofA senior editor, at Paul.Bonner@aicpa-cima.com.