The Coronavirus Aid, Relief and Economic Security (CARES) Act offers a deferral of employer payroll taxes (specifically Social Security) to be repaid over two years.

Who is Eligible?

  • Any business that is remitting Social Security tax payments.
  • The Bill originally stated that an employer must NOT be utilizing the Paycheck Protection Program (PPP) loan in order to take advantage of this provision. The U.S. Treasury has since indicated that an employer CAN take advantage of this up until the PPP loan is forgiven.

Covered Period

  • The coverage period is date of enactment (March 27) through December 31, 2020.
  • It should be noted that many articles and publications indicate this won’t begin until April 1, 2020.

Amount of Deferral

  • EMPLOYER portion of Social Security taxes.
    • The employee portion of Social Security is a trust fund tax and not eligible for deferral. An owner can be personally liable if this portion is not paid. 
  • There are also provisions for deferral of railroad retirement taxes and SECA tax liability.
  • Medicare taxes are NOT included.

Amount of Repayment

  • 50% to be repaid by December 31, 2021
  • Remaining balance to be paid by December 31, 2022