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Payroll Tax Payment Extensions for Employers Under The CARES Act

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The CARES Act, enacted on March 27, 2020, contains a provision that will allow most employers and self-employed individuals to delay payment of the 6.2% employer share of the Social Security payroll tax from the date of the enactment through the end of 2020.  Additional payroll taxes that can be deferred are the employer and employee representative portion of Railroad Retirement Taxes (attributable to the employer FICA rate) and half of the 12.4% self-employment (SECA) tax liability.

The employer will pay the delayed tax over two years with half due by December 31, 2021 and the other half by December 31, 2022.  These provisions will be available to everyone, regardless of income.  Important items to note regarding this delay of payment:

  • Taxpayers who have had indebtedness forgiven under the CARES Act cannot delay payments.
  • Deferral is not provided to employers who receive assistance through the Paycheck Protection Program
  • The 1.45% employer share of the Medicare payroll tax is not allowed to be delayed
  • The additional.9% Medicare tax is not allowed to be delayed