Deferral of the Employer Portion of Social Security Tax
- The deferral applies to deposits and payments of the employer's share of Social Security tax through December 31, 2020. - If/when the PPP Loan is forgiven (you will be notified by your banker of this decision), you can NO LONGER defer the tax. - The tax amount deferred would need to be 50% paid by 12/31/2021 and 50% paid by 12/31/2022. Notes and Recommendations - The deferral of Social Security taxes is not forgivable. This is in essence taking on debt; basically a loan that needs to be paid back. Make sure to consider these repayments in your budgets for 2021 and 2022. - We do not recommend deferring these taxes if you believe you may have trouble paying them back. Consult your attorney, but one cannot generally file bankruptcy against taxes owed. - If you take the deferment, we recommend stopping it once your business is back up and running, to keep debt to a minimum.
- If you would like to defer these taxes, please contact us and confirm the date you would like to begin deferring. - VERY IMPORTANT: Easytrack must be notified if/when the PPP Loan is forgiven so we STOP deferring the taxes. If we are not notified and given sufficient time to act on our end, and the IRS assesses penalties/interest on late payments as a result, you will be liable for any balance due. - If you would like to stop deferring the taxes prior to the PPP Loan being forgiven, you must contact us so we can stop the deferral. For a full list of FAQs from the IRS, visit this web page.