Apr 28, 2020 | COVID-19, Payroll Solutions

Last Updated: August 6, 2020

Deferral of Employment Tax Deposits and Payments Through December 31, 2020

We would like to make you aware that part of the CARES Act allows employers to defer the deposit and payment of the employer’s share of Social Security taxes (6.2% of gross taxable wages).

You can defer payments of the employer’s portion of Social Security now through December 31, 2020.

All employers may defer the deposit and payments, however, employers that receive a loan under the Small Business Administration Act (PPP Loan), may not defer the deposit and payment after the employer receives a decision from the lender that the PPP loan is forgiven under the CARES Act. The amount of the deposit and payment of the employer’s share of Social Security that was deferred through the date that the PPP loan is forgiven continues to be deferred and will be due on the applicable dates (see below).

The deferred deposits of the employer’s share of Social Security tax must be deposited by the following applicable dates to be treated as timely (and avoid a failure to deposit penalty). 

  1. December 31, 2021 – 50% of the deferred amount. 
  2. December 31, 2022 – the remaining amount. 

For frequently asked questions from the IRS please click here, for further information.

If you would like Payroll Solutions to defer the employer’s share of Social Security now until December 31, 2020, or the date the PPP loan is forgiven, please reach out to your payroll specialist.

It is your responsibility to contact your payroll specialist to notify them of the date your PPP loan is forgiven to stop deferral of payment. If you have any questions, please contact your payroll specialist or email payroll@solutionsforpayroll.com