Deferral of employment tax and deposit
- JW CPA
- Jul 1, 2020
- 1 min read
Recently, IRS announced that 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.
What is CARES act?
- It refers to The Coronavirus, Aid, Relief and Economic Security Act.
What period does this apply tok
- Beginning on March 27, 2020 and ending December 31, 2020.
- 941 quarterly tax returns will be revised for the second calendar quarter of 2020 (April- June, 2020).
- Employers might need to make an election to be able to defer.
Which employer may defer?
- All employers may defer. It is only for the employer's share of Social Security Tax.
May employers still defer the deposit and payment even if the employer receives a loan under SBA act (PPP)?
- Yes, even if the loan is forgiven or partially forgiven, the employer may still defer.
When does the deferred deposit and must be deposited?
- By December 31, 2021, 50% of the deferred amount; and
- By December 31, 2022, the remaining amount.
- Self-employed individuals may defer the payment of 50% 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.
Please let me know if you have any questions.
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