CARES Act Deferral of Employer Social Security Taxes

IRS-FAQ-Clarifies-Social-Security-Tax-Deferral

The Coronavirus, Aid, Relief and Economic Security Act (CARES Act) allows employers to defer the deposit and payment of the employer’s share of Social Security taxes and self-employed individuals to defer payment of certain self-employment taxes.

As we near the end of Quarter 2, SDP would like to remind our clients of the importance of regularly verifying your tax payments in EFTPS. In particular, if you have opted to defer the deposit and payment of employer social security taxes, be sure to inform SDP when you would like us to impound and pay these.

Important Notice: CARES Act Deferral of Employer Social Security Taxes

It is our fiduciary duty to follow your instructions to defer should you request us to. However, we wanted to remind you of the following:

  • If you requested SDP to defer ER Social Security taxes, we are not impounding and will not pay them until you notify us to.
  • Please remember that you remain liable for employment taxes. We strongly recommend checking EFTPS on at least a quarterly basis to verify your tax deposits.

For additional FAQs on the deferral of employer Social Security Tax Deposits, please visit the resource page available on irs.gov.

PPPFA Changes Regarding FICA Tax Deferral

Under the Paycheck Protection Program Flexibility Act (PPPFA), PPP Borrowers can now enjoy this deferral as well. Previously, PPP borrowers were denied this benefit once their loans were forgiven. However, now they may defer even if their PPP loan is forgiven.

PPP loan borrowers may defer payment of FICA from the period of March 27-December 31, 2020, repaying half in 2021 and the remainder in 2022.

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Future Updates

For more business tips and reminders, be sure to check out SDP’s blog at www.sdppayroll.com/blog. Here, we post weekly content to keep you compliant and informed. And don’t forget to follow us on FacebookTwitter, and LinkedIn for even more HR and business updates!

 

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