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
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.
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.
Learn More About this Program: