Did you choose to defer your 2020 social security tax payment? Some employers and self-employed individuals took the option offered from the CARES Act, to put off paying the employer’s share of their social security tax liability.
The pandemic created financial hardships; therefore, the federal government offered this option as a temporary boost to the economy. This allowed people with less than $4,000 in wages every two weeks or an equivalent for other pay periods to take advantage of this deferral.
While most employers had the option to pass on it, military service members and federal employees were mandated to opt in.
The IRS sent out billing notices for those affected as the first half was due January 03, 2022 and the second half will be due on January 03, 2023. Employers must send repayments to the IRS as they collect it. If not, interest and penalties will be assessed on any unpaid balances.
Payments must be separated from other taxes and can be made as follows:
- Electronic Federal Tax Payment System (EFTPS)
- Credit or debit card
- Money order or check
For more information, visit the IRS’s website, Notice 2020-65
https://www.irs.gov/newsroom/what-employers-need-to-know-about-repayment-of-deferred-payroll-taxes
Reblogged this on Your Back Office Accounting and commented:
A valuable reminder from Shermali!
Hi Joe: It’s nice to know that you found value in this post and have shared it with your followers. Thank you for your feedback.
Much success to you in your business this year!