For businesses that participated in the deferral of social security tax withholdings under the President’s August memorandum and Notice 2020-65, the IRS has provided instructions on how to report this deferral of social security taxes to their employees on 2020 Forms W-2.
The IRS instructs that 2020 Forms W-2 should be filed showing total social security wages (including the wages for which social security taxes were not withheld) in Box 3, but only reporting the social security taxes actually withheld during 2020 in Box 4. Upon payment of the deferred social security taxes via employee withholdings in 2021, the employer will file a Form W-2C Corrected Wage and Tax Statement for each employee, reporting the 2020 social security taxes that were withheld in 2021.
See Notice 2020-65 and Form W-2 instructions. Also see the following IRS website: https://www.irs.gov/forms-pubs/form-w-2-reporting-of-employee-social-security-tax-deferred-under-notice-2020-65
