How self-employed individuals and household employers can repay deferred Social Security tax

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allowed self-employed individuals and household employers to defer the payment of certain Social Security taxes on Form 1040 for tax year 2020 over the next two years. Half of the deferred Social Security tax is due by Dec. 31, 2021, and the remainder is due by Dec. 31, 2022.

How individuals can repay the deferred taxes

Individuals can pay the deferred amount any time on or before the due date.

• Payments can be made through the Electronic Federal Tax Payment System (EFTPS), by credit or debit card, money order, or with a check.
• Payments should be separate from other tax payments to ensure they are applied to the deferred tax balance on tax year 2020 Form 1040, since IRS systems won’t recognize the payment for deferred tax if it is with other tax payments or paid with the current Form 1040.
• Payments should be designated the as “deferred Social Security tax.”

Individuals making deferred Social Security tax payments in EFTPS should select 1040 U.S. Individual Income Tax Returns and deferred Social Security tax for the type of payment. They must apply the payment to the 2020 tax year where they deferred the payment.

What individuals should do if they are unable to pay in full by the installment due date

Individuals who are unable to pay the full deferred tax amount should pay whatever they are able to pay by the installment due dates, in order to limit penalty and interest charges.

If the installment amount is not paid in full, the IRS will send the taxpayer a balance due notice. Taxpayers should follow the instructions on the notice to make a payment or apply for a payment plan. They can also visit the Paying Your Taxes page on IRS.gov for additional information about ways they can pay, what to do when they can’t pay, and viewing their tax account.