Self employment tax deferral

[tscott1205]

Client filed his 2020 tax return. He owed s/e tax. He did not defer any of the s/e tax. Can he amend his 2020 tax return to defer the maximum amount.

[Just-Lisa-Now-]

Did he have a refund on his 2020 return? 

If you end up with a refund they wont let you defer, they'll reduce the refund.

[tscott1205]

No refund. The taxpayer owed

[Just-Lisa-Now-]

If they havent paid yet, I guess it may be possible to utilize the deferment.

[tscott1205]

Not sure if they have paid already or not. The return has been efiled and accepted

[tscott1205]

Can't find any reason why they can't amend.

[Just-Lisa-Now-]

If they already paid, IRS wont refund it back and let it be deferred.

[tscott1205]

Don't sound fair

[qbteachmt]

"Don't sound fair"

It's not only fair, but provided to make it more fair.

That's not a Creditable Refund; it's a deferral for something not yet paid, so it isn't also considered past due.

It's part of parity for the Self-employed to be treated as employers are treated for the Form 7200 provision.

"Employers that have already deposited all or any portion of the employer's share of Social Security tax during the payroll tax deferral period may not subsequently defer payment of the tax already deposited and generate an overpayment of tax"

"Employers that have already paid the employer's share of Social Security tax on wages during the payroll tax deferral period may not subsequently defer the payment of the tax"

Remember that SE = both an employer and an employee for purposes of the Social Security tax.

[tscott1205]

Hasn't already paid but have already filed