Repaying Social Security Tax Deferrals – What Employers Need to Know

As part of the CARES Act (passed March 27, 2020), employers could opt for a Social Security Tax Deferral for the employer portion of their federal Social Security taxes for the rest of 2020. For tax payments deferred in 2020, half are due in 2021 and half in 2022.  If a company deferred taxes during 2020, they’re responsible for repaying these amounts to the IRS directly.

So, how do you pay and when to pay this Social Security Tax Deferral?

Payments for the employer Social Security Tax Deferral must be deposited by the following dates:

• December 31, 2021: 50% of eligible deferred amount
• December 31, 2022: the remaining amount

The IRS will send a reminder notice to employers before each due date for all deferred employer portions. To determine the amount of tax due for the period, each return period is treated separately — so Form 941 filers that deferred in all four quarters of 2020 may receive four reminder notices stating the deferred amounts that are due on the applicable dates in 2021 and 2022, even though the amounts for all four quarters will have the same due dates of December 31, 2021 and December 31, 2022.

Employers can start repaying these taxes before the due dates electronically using EFTPS (preferred method), by credit or debit card, or by a check or money order. 

​​The electronic federal tax payment system (EFTPS) is the tax payment service provided by the U.S. Department of Treasury. Companies who are enrolled with EFTPS can make federal tax payments electronically and can monitor their tax payments.

The IRS considers employers responsible for the timely filing of employment tax returns and the timely payment of employment taxes for your employees, even if you have authorized a third party to file the returns and make the payments. Therefore, it is recommended that you periodically log into EFTPS to monitor your account and ensure that timely tax payments are being made for you. 

Tips on repaying by EFTPS:

• Employers that file Form 941: select Form 941, the calendar quarter in 2020 to which the payment relates, and payment due on the IRS notice.
• Employers that file annual returns, like the Form 943, 944, or CT-1: select the return and 2020 tax year to make a payment.

For more information, visit EFTPS.gov, or call 800-555-4477 or 800-733-4829 (TDD).At HRO it is our goal to bring you the most up-to-date information on current HR topics and how it affects you and your business. Whether you’re a startup or a growing company with hundreds of employees, we’re able to deliver HR & Payroll solutions to ignite your growth.