Deferral credit for certain Schedule SE files

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@tscott wrote:

The question is misleading..."Enter the portion of line 3 that can be attributed to March 27,2020 through December 31, 2020"

 

The program should ask a second question ... do you want to defer this tax to future?

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For a property Schedule SE, that question is correct.

I agree, it would be nice to actually have a 'required field' asking if we WANT to defer or not.  But if you to the 1040 Worksheet, then Line 12 of Schedule 3 (where the deferral happens), you can enter zero in the worksheet to eliminate the deferral.

Or, instead of the second question, just enter zero for the first question.  Sometimes you will drive yourself bonkers trying to reason with the software.  So as long as you get the results you want it doesn't pay to try and argue with it.

I was referring to not wanting to enter 0 on Form SE line 18 as a work around.  But I now see that on the 1040/1040SR Wks on Schedule 3 there is a worksheet called "Deferral for Certain Schedule H or SE Filers" where you can enter on line 11 of the worksheet the amount you want to defer on line 12e of Schedule 3 which prevents a refund of SE taxes paid.

The biggest issue now is that the software will automatically refund SE taxes deferred.  But the IRS says you cannot have those taxes refunded:https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-2020

30. Is a self-employed individual who defers 50 percent of the Social Security tax on net earnings from self-employment income, or a household employer that defers the employer's share of Social Security tax under section 2302 of the CARES Act, eligible for a refund of the deferred amount of tax at the time the taxpayer files its Form 1040, Individual Tax Return? (added July 30, 2020)

Generally, no. A taxpayer who has deferred his or her payment of the employer's share of Social Security tax or 50% of the Social Security tax on net earnings from self-employment under section 2302 of the CARES Act is not eligible for a refund due to the deferral because the deferral amount is a deferral of payment, not a deferral of liability. Therefore, the deferral itself does not result in an overpayment of taxes reported on Form 1040. However, if a household employer is eligible for advanceable paid leave credits under the FFCRA and reports those credits on Schedule H, Form 1040, the taxpayer may receive a refund of the paid leave credits even while deferring the employer's share of Social Security tax. This does not apply to credits for sick leave and family leave equivalent amounts for self-employed individuals.