Given the limited IRS guidance on the payroll tax deferral, the limited time given to implement this provision, and the fact that this deferment would have to be repaid, most employers are opting out of the deferment. In fact, the American Payroll Association is unofficially recommending that employers “continue as normal” at this time. This information is based on social media posts from the current APA President Elect, Bruce Phipps.
In addition, Microsoft’s tax regulatory update website has the following note:
“There will be no update to Microsoft Dynamics GP for the Executive Order Payroll Tax Deferral (Notice 2020-65) released on August 28. This is because the IRS has not published new tax table changes for the deferral. Also the deferral is optional for employers to implement. Any questions regarding the regulation of the tax deferral should be directed to a tax attorney or tax accountant.”
One possible insight for employers interested in providing the deferments: The GPUG.com Communities Open Forum page has a thread on Payroll Tax Deferral that includes a possible solution.
In addition to the possible solution found on the GPUG.com Communities Open Forum, ACE Microtechnology recently posted an article on the ERP Software Blog suggesting a Dynamics GP work around for Employee Payroll Tax Deferrals found HERE. As with any possible solution, and, in addition to the disclaimers found in the article, Integrity Data does not endorse a specific approach and would state that you use any suggested approach at your own risk and test first prior to using that approach in production.
The lack of clarity and the lack of definitive answers around ongoing questions make it difficult for us to suggest solutions or provide sound guidance for employers interested in making the IRS payroll tax deferral available. Stay tuned to this blog for further updates and information as they become available.