Deferred 2020 Social Security Tax are Due Jan. 3 for Employers and Self-employed

Deferred 2020 Social Security Tax are Due Jan. 3 for Employers and Self-employed

Even if you did not receive a reminder from the IRS, you are still responsible for making the payment on time, even if you did not receive a bill

 

As part of the COVID relief provided during 2020, employers and self-employed people could choose to put off paying the employer’s share of their eligible Social Security tax liability, normally 6.2% of wages. Half of that deferral is now due on Jan. 3, 2022, and the other half on Jan. 3, 2023.

 

See Relax Tax's Tax Audit Assistance at relaxtax.com/audit

 

Deferred Tax Liability

Reminder - If you are an employer or self-employed and chose to defer paying part of your 2020 Social Security tax obligation you should have received a reminder from the IRS reminding you that the first payment is due January 3, 2022. Even if you did not receive a reminder from the IRS, you are still responsible for making the payment on time, even if you did not receive a bill.

 

EFTPS Tax payment

How to Repay Deferred Taxes - Employers and individuals can make the deferral payments through the Electronic Federal Tax Payment System or by credit or debit card, money order or with a check. To be sure these payments are credited properly, they must be made separately from other tax payments.

EFTPS has an option to make a deferral payment. On the Tax Type Selection screen, choose Deferred Social Security Tax and then change the date to the applicable tax period (typically, the calendar quarter in 2020 for which tax was deferred). Visit EFTPS.gov, or call 800-555-4477 or 800-733-4829 for details.

 

See this related post from Dennis Harabin: Be In the Know: The Reason Why Your Tax Return Is Delayed
The prompt means that the IRS has received your return, but due to Covid-19 delays, the IRS is experiencing a considerable backlog, slowing processing times and disbursements. Typically, the IRS processes tax returns and issues refunds within 21 calendar days of receipt. The IRS even stated in January communicating the 21-day time frame. Add in the pandemic-related tax changes and child tax credit advances, and this tax season is more complicated than ever.

 

Individual taxpayers can also use Direct Pay, available only on IRS.gov. Select the "balance due” reason for payment. If paying with a debit or credit card, select "installment agreement." Apply the payment to the 2020 tax year where the payment was deferred.

If you owe deferred 2020 deferred Social Security tax payments and have questions about how to make the payment, please give this office a call at 551-249-1040.    


Do you need more information? You can reach out to Dennis Harabin at Relax Tax today!

 

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