This deferral, which was intended to put more money in people’s pockets, is troublesome for all. For example, an employee making $800 per week, would see an extra $49.60 in their weekly paycheck until December 31, 2020. Let’s assume their take home net pay was $640.00 before this deferral. The deferral would increase their take home pay to $689.60. But starting in January 2021 this employee would then see $49.60 less than before the deferral, $590.40 ($640.00-$49.60).
Our Firm highly discouraged utilizing this deferral, feeling that this would only create an increased hardship starting in January for employees. Employers who did utilize this Social Security Tax Deferral, will have to file amended W-2 forms after the deferred tax is collected in 2021, adding to the burden of employers.