Tax Deferral Program
The IRS has just released guidance on the tax deferral of employee SS tax.
All companies are immediately eligible for deferral of the employer share of SS Tax. The deferral will last until December 31, 2020. 50% of the amount deferred is due to the IRS on December 31, 2021 with the remainder due December 31, 2022.
All employers may defer the Employer tax portion of the SS tax. However, employers that receive a loan under the Small Business Administration Act, as provided in section 1102 of the CARES Act (the Paycheck Protection Program (PPP)), may not defer the deposit and payment of the employer's share of social security tax due on or after the date that the PPP loan is forgiven under the CARES Act.
Employers who have received a PPP loan, but whose loan has not yet been forgiven, may defer deposit and payment of the employer's share of social security tax that otherwise would be required to be made beginning on March 27, 2020, through the date the lender issues a decision to forgive the loan in accordance with paragraph (g) of section 1106 of the CARES Act, without incurring failure to deposit and failure to pay penalties. Once an employer receives a decision from its lender that its PPP loan is forgiven, the employer is no longer eligible to defer deposit and payment of the employer's share of social security tax due after that date. However, the amount of the deposit and payment of the employer's share of social security tax that was deferred through the date that the PPP loan is forgiven continues to be deferred and will be due on the "applicable dates."
In order to enroll in this please contact your client experience team member or your HR business partner. We will send you an addendum to your contract. Once this is signed, we will work with our payroll team to have this begin in our system. Please note this can take up to five business days. Once you are notified of the loan forgiveness you need to inform us immediately to turn back on the SS tax deferral. If you have any further questions please contact your client experience team member or HR business partner.