01 Apr CARES Act – Payroll Tax Deferral
In addition to potentially receiving the SSI Tax Credit, the CARES Act allows employers to defer the payment of the employer’s share of the 6.2% Social Security tax on wages paid beginning on March 27, 2020 and ending on December 31, 2020. The deferred amounts are payable in two installments, with 50% of such taxes being due on December 31, 2021, and the remainder due on December 31, 2022. This deferral of Social Security taxes is not, however, allowed where the employer has had a covered loan forgiven, as discussed above under Forgivable SBA Loan Program.
OUR BOTTOM LINE: This is a fairly generous term. Hopefully you won’t need that long. A corresponding deferral is also permitted for the equivalent portion of self-employment taxes. Presumably to be claimed on your personal tax returns or via a reduction of estimated taxes. We will await IRS guidelines and inform you.