Deferred Payroll Taxes to Be Paid in 2021
The IRS says Social Security payroll taxes that aren't collected this year under President Trump's executive order will have to be withheld and paid early next year.


President Trump recently issued an executive memorandum suspending the collection and payment of Social Security payroll taxes from September 1 until the end of the year for workers making less than $4,000 for any bi-weekly pay period (i.e., $2,000 per week, or $104,000 per year). The president's action doesn't eliminate the tax debt – it just delays withholding and payment of the tax. However, the memorandum didn't say when the tax had to be paid. But the IRS has answered that question.
Employers aren't required to halt withholding and payment of the tax. But if a business does comply with the president's order, it will have to collect the deferred taxes from their workers' paychecks ratably from January 1 to April 30, 2021. So, during the first four months of 2021, their employees will have double withholding from their paychecks for the 6.2% Social Security payroll tax.
If he wins the election on November 3, President Trump says he will push for the elimination of the deferred taxes so that workers will not have to pay them later. However, that will require Congressional action. Depending on the election results, that could be a very difficult thing to get.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
As a result, if your employer stops withholding the payroll tax from your wages in 2020, you probably don't want to spend that money right away. Our advice is to put that money aside for the time being. While it's possible Congress will eliminate the tax debt, that doesn't appear to be likely. If there's no Congressional action, then the deferred taxes will be taken out of your paycheck during the first four months of 2021.
For more information on the president's executive order to defer Social Security payroll taxes, see What Trump's Payroll Tax Cut Will Mean for You.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Rocky Mengle was a Senior Tax Editor for Kiplinger from October 2018 to January 2023 with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, Rocky worked for Wolters Kluwer Tax & Accounting, and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky holds a law degree from the University of Connecticut and a B.A. in History from Salisbury University.
-
Four Surprising Signs You’ll Never Retire (and How to Fix Them)
Gearing up to retire? If any of these four signs ring true, you may want to make some changes before you do.
-
Stocks Rise After Trump-Powell Fed Tour: Stock Market Today
Nvidia hit a new all-time high intraday, but another renowned semiconductor name and some less iconic stocks were bigger movers Friday.
-
Five Ways Trump’s 2025 Tax Bill Could Boost Your Tax Refund (or Shrink It)
Tax Refunds The tax code is changing again, and if you’re filing for 2025, Trump’s ‘big beautiful’ bill could mean a bigger refund next year, a smaller one, or something in between. Here are five ways the new law could impact your bottom line.
-
New SALT Deduction Could Put Thousands Back in California Homeowners’ Pockets
Tax Breaks The federal state and local sales tax (SALT) deduction cap is higher this year, and could translate into bigger savings for Golden State homeowners.
-
Money for Your Kids? Three Ways Trump's ‘Big Beautiful Bill’ Impacts Your Child's Finances
Tax Tips The Trump tax bill could help your child with future education and homebuying costs. Here’s how.
-
New Cap on Gambling Loss Deductions Begins Soon: What to Know Now
Tax Changes A gambling losses tax deduction cap in Trump’s “big beautiful bill” is causing an uproar. Here’s what you need to know.
-
Why Your Summer Budget Feels Tighter: Tariffs Push Up Inflation
Tariffs Your summer holiday just got more expensive, and tariffs are partially to blame, economists say.
-
Alabama Tax-Free Weekend 2025
Tax Holiday Here’s everything you need to know about the 2025 back-to-school Alabama sales tax holiday.
-
Key 2025 Tax Changes for Parents in Trump's Megabill
Tax Changes Are you a parent? The so-called ‘One Big Beautiful Bill’ (OBBB) impacts several key tax incentives that can affect your family this year and beyond.
-
‘I Play Pickleball in Retirement.’ Is It HSA-Eligible?
Retirement Tax Staying active after you retire may be easier with these HSA expenses. But there’s a big catch.