9.17.2020 - Decision Not to Defer Social Security Tax Withholding  - email from Dawn Tafoya

On Aug. 28, 2020, the IRS issued Notice 2020-65, allowing employers to temporarily defer withholding the employee's portion of Social Security payroll taxes for pay periods starting Sept. 1 through Dec. 31, 2020, as directed by an Executive Order issued by President Donald Trump. Unless Congress passes additional legislation forgiving the repayment of this tax deferral, employees would be required to repay the taxes by doubling the employee's Social Security tax paycheck withholding to 12.4 percent during the first four months of 2021.

Master Magnetics, Inc. has decided not to stop the withholding of Social Security taxes from employees' pay at this time. This decision was made due to the administrative challenges of implementing changes to our Paycom payroll software on such short notice, coupled with concerns about the significant reduction in an employee’s take-home pay that would occur during the first four months of 2021.

In the event that Congress passes legislation forgiving the tax repayment or the Treasury Department issues guidance regarding the ability of employees to make individual choices regarding participation in this tax deferral, we will reassess this decision and employees will be promptly notified of changes, if any.

Should you have any further questions, please contact Human Resources.

A posting has been placed on the communication board in the lunchroom for all employees to view.