Pertinent information for churches regarding the Social Security Tax Deferral
As you may be aware, President Donald Trump signed an executive order that allowed for the deferral of social security taxes paid by employees. This order impacts the employee part of the Social Security payroll tax (6.2%) (not Medicare) for those whose bi-weekly payroll amount is $4,000 or less, or who have a monthly payroll amount of $8,666.66 or less (annual of $104,000). It is effective September 1.
Bear in mind this is not a waiver or exemption but merely a deferral. The order allows for non-payment of such taxes for 2020, but in 2021 they will become due and employees will owe them to the IRS. Those who participate in this order would see their share of the payroll taxes in 2021 doubled until the 2020 deferral amounts are paid in full.
This order does not impact clergy as they are self-employed for Social Security. In fact, if clergy make quarterly estimated tax payments, the September – December amount is not due until January 15, 2021 which makes any deferral moot.
The Conference Treasurer and the Conference Staff Relations Committee have concurred this is not a good alternative for conference staff and will therefore not be participating. We recommend that our churches carefully consider the benefits and challenges of the Executive Order.
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