Dansko Update 09/03/2020

Payroll Tax Deferral Status

In August, the President signed an executive order which allows employers to defer withholding the 6.2% employee portion of the Social Security tax. The deferral only applies to employees making less than $4,000 Gross bi-weekly (less than $104,000 per year).  The executive order delays, rather than forgives, the employee’s share of the Social Security tax.

Currently, any taxes deferred during the September 1, 2020 to December 31, 2020 deferral period are required to be repaid by April 2021.  So while employees to which this applies would see higher paychecks than normal through the rest of 2020, their paychecks for January through April 2021 would actually be lower than normal due to the double withholding. If any deferred payroll taxes are not repaid by April 30, interest, penalties, and additions to tax will begin to accrue May 1.

The IRS guidance providing the currently available details were issued on August 28th. Dansko’s payroll provider, ADP is currently reviewing the guidance and is evaluating the product changes needed to support this executive order. Once additional guidance is available, Dansko will evaluate and provide additional information to employees.

 Dansko closed for Business Monday 9/7 in observance of the Labor Day Holiday

Have a safe and peaceful Labor Day Weekend. Thank you for your hard work and flexibility.