MSU Will Not Participate in the Social Security Deferral Program
Per IRS Notice 2020-65 (released August 28, 2020), employers may elect to defer the withholding and payment of the employee share of social security taxes (6.2%) from September 1 through December 31, 2020. The deferral only applies to employees whose compensation is approximately $104,000 or below.
Please note that this is simply a deferral of taxes - it is not a forgiveness of taxes. Any taxes deferred must be recouped and repaid by the employee through payroll deduction between January 1 and April 30, 2021. This means that instead of having 6.2% Social Security taxes deducted during the January through April 2021 time period, employees would have 12.4% deducted to repay the amount deferred in 2020.
After assessing the overall Social Security deferral plan, MSU has elected to not participate due to the payback burden that will be placed on employees beginning in January 2021. As a result, Social Security taxes will continue to be deducted, as normal. If you have any questions please feel free to reach out to the Payroll department at 517-355-5010.