Deferring Payroll Tax Obligation
On August 8, 2020, President Trump directed the Secretary of the Treasury to defer the withholding and payment of the employee portion of social security taxes from September 1 to December 31, 2020. The Internal Revenue Service (IRS) confirmed on September 3, 2020 the tax deferral is optional and employers are not required to participate.
The directive does not eliminate the tax liability for employees. The IRS advised on August 28 that employers that choose to participate should withhold the deferred taxes from employees pay from January 1 to April 30, 2021 (next year), in addition to normal withholdings.
After a detailed evaluation and legal review, the State of Hawaii will not be participating and will continue standard tax withholding practices for our employees until such a time that conditions warrant reevaluation.