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Social Security Tax Deferral For Small Businesses

Social Security Tax Deferral For Small Businesses

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Posted by EJ Brown

April 6, 2020


Download a free Social Security Tax Deferral facts sheet now:


A provision of

The Coronavirus Aid, Relief, and Economic Security (CARES) Ac

t, if you're an employer or self-employed individual, you may defer the remainder of your 2020

Social Security

payroll tax payments for 2020. 

Half of the deferred amount will need to be paid by the end of 2021 and the second half due by the end of 2022.

Note: Employers who receive SBA Loans that can be forgiven under the CARES Act are not eligible for this payroll tax deferral.

Here’s an example of how this works:

My Social Security payroll tax obligations from April through December 2020 are $20,000...I now receive a credit for $10,000 on my 2020 taxes, reducing this cost by one-half. I will owe the additional $10,000 by the end of 2022.

FAQs

Do I need to continue withholding social security taxes from my employees’ paychecks?

Yes, you should continue to withhold this tax and sending it to the IRS. Your employees’ contribution stays the same. You only postpone the business’s contribution.


Download a free Social Security Tax Deferral facts sheet now:


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