CARES Act Allows Delay of Employer Payroll Tax Payments

 

An employer is responsible for paying its share (6.2 percent) of Social Security taxes and its share (1.45 percent) of Medicare taxes for each employee’s covered wages.  Generally, an employer must deposit such amounts to the U.S. Treasury electronically either semi-weekly or monthly. The CARES Act will allow employers (and self-employed individuals),  to defer paying their portion of the Social Security payroll tax (6.2 percent) otherwise due with respect to wages accrued between March 27, 2020 and December 31, 2020. The deferred amounts will ultimately have to be paid to the U.S. Treasury in two installments. Half of the deferred amount of payroll taxes from 2020 will be due December 31, 2021, with the remaining half due December 31, 2022.

 

The above delay provisions apply to all employers regardless of size.  However, employers who receive Small Business Act loans that are forgiven under the CARES Act (so that the Federal government effectively gave them cash—that they did not have to repay —to fund as much as eight weeks of their payroll costs) are not eligible for this payroll tax deferral.

 

Latest Thinking

View more Insights
Insights Center
close
Loading...
Knowledge assets are defined in the study as confidential information critical to the development, performance and marketing of a company’s core business, other than personal information that would trigger notice requirements under law. For example,
The new study shows dramatic increases in threats and awareness of threats to these “crown jewels,” as well as dramatic improvements in addressing those threats by the highest performing organizations. Awareness of the risk to knowledge assets increased as more respondents acknowledged that their