{"id":19532,"date":"2020-06-06T08:00:20","date_gmt":"2020-06-06T13:00:20","guid":{"rendered":"https:\/\/taxprocenter.proconnect.intuit.com\/?p=19532"},"modified":"2021-04-06T08:40:47","modified_gmt":"2021-04-06T13:40:47","slug":"cares-act-allows-employers-to-defer-employer-portion-of-social-security-payroll-taxes","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/cares-act-allows-employers-to-defer-employer-portion-of-social-security-payroll-taxes\/","title":{"rendered":"CARES Act allows employers to defer employer portion of Social Security payroll taxes"},"content":{"rendered":"

This content is for the first stimulus relief package, The Coronavirus Aid, Relief and Economic Security Act (CARES Act), which was signed into law in March 2020. For information on the second stimulus relief package, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, please visit the second post here<\/a>.<\/em><\/p>\n

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act<\/a> that was signed into law on March 27, 2020, businesses may delay paying the employer portion of the Social Security payroll taxes on wages paid. According to the IRS, the deferral applies to deposits and payments of the employer’s share of Social Security tax that would otherwise be required to be made during the period beginning on March 27, 2020, and ending Dec. 31, 2020.<\/p>\n

Any 2020 deferred payroll amounts would be due to the government in two installments:<\/p>\n

    \n
  1. One-half at the end of 2021.<\/li>\n
  2. The remaining one-half at the end of 2022.<\/li>\n<\/ol>\n

    This deferral applies to the 6.2% Social Security (old age, survivors, and disability insurance tax) portion of the employer\u2019s obligation. Self-employed people are allowed to defer 50% of their Self-Employment Contributions Act (SECA) tax payment, including any related estimated tax liability. The deferral does not apply to the employee\u2019s portion of the Social Security tax or the 1.45% Medicare<\/a> tax.<\/p>\n

    Thanks to the PPP Flexibility Act, this deferral option is now available if the taxpayer or borrower is eligible to receive loan forgiveness under the CARES Act for certain SBA loans, such as the Paycheck Protection Program<\/a> loan.<\/p>\n

    Advantages of the payroll deferral:<\/b><\/p>\n