– Employers can defer the deposit and payment of the employer’s share of social security taxes and certain railroad retirement taxes under the CARES Act.
– The deferral period is from March 27, 2020, to December 31, 2020, and applies to deposits and payments that would otherwise be required during this time.
– Employers will not need to make a special election to be able to defer deposits and payments of these employment taxes. – All employers may defer the deposit and payment of the employer’s share of social security tax.
– Employers who have received a PPP loan, but have not yet had it forgiven, may defer deposit and payment of the employer’s share of social security tax without penalties.
– Once an employer receives a decision from its lender that its PPP loan is forgiven, the employer is no longer eligible to defer deposit and payment of the employer’s share of social security tax due after that date. 1. Employers can defer deposits of the employer’s share of social security tax in addition to the relief provided in Notice 2020-22 for deposit of employment taxes in anticipation of the Families First Coronavirus Relief Act (FFCRA) paid leave credits and the CARES Act employee retention credit.
2. An employer that is eligible to claim refundable paid leave tax credits or the employee retention credit can defer its deposit and payment of the employer’s share of social security tax prior to determining the amount of employment tax deposits that it may retain in anticipation of these credits, the amount of any advance payments of these credits, or the amount of any refunds with respect to these credits.
3. The deferred deposits of the employer’s share of social security tax must be deposited by December 31, 2021 for 50 percent of the deferred amount, and by December 31, 2022 for the remaining amount to be treated as timely and avoid a failure to deposit penalty. – The deferred payment of the employer’s share of social security tax must be paid on the “applicable dates” to avoid a failure to pay penalty under section 6651 of the Code.
– Self-employed individuals are eligible to defer payment of 50 percent of the social security tax on net earnings from self-employment income for the period beginning on March 27, 2020, and ending December 31, 2020.
– There is no penalty for failure to make estimated tax payments for 50 percent of social security tax on net earnings from self-employment income during the payroll tax deferral period. – Tax professionals are available for consultation at 305.670.3370 or SBAhelp@ksdt-cpa.com.
– KSDT CPA is prepared to assist with tax processes.
– To receive assistance, individuals can fill out a form on the website for the team to reach out.
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