Update on Payroll Tax Deferral Program
Employers have the option of deferring tax withholding of FICA taxes from employee paychecks on compensation paid from Sept. 1 through Dec. 31, 2020, under Presidential Order 2020-65: Payroll Tax Deferral. UW–Madison, along with the other UW System institutions and the State of Wisconsin, will not be implementing this option.
Payroll tax deferral does not waive the employee’s obligation to pay these taxes. Instead, the deferral program would require employees to have the deferred amount from 2020 deducted from their paychecks starting in January 2021. The tax amounts for 2021 would also be deducted at that time. If implemented, this would result in large tax withholding amounts from paychecks in 2021.
Any new developments will continue to be monitored closely.