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Deferral of Employer Social Security Taxes

Employers may defer payment of the employer portion of Social Security (FICA) tax, beginning after the effective date of the CARES Act through December 31, 2020. Half (50%) of the deferred amounts would be due on December 31, 2021 and December 31, 2022.

Restrictions Employers that receive PPP loan forgiveness are not permitted to continue to defer employer Social Security (FICA) taxes. *
  • * The IRS issued guidance clarifying that an employer that has applied for and received a PPP loan that is not yet forgiven can defer deposit and payment of the employer’s share of social security tax without incurring penalties. Once an employer receives a decision from its lender that its PPP loan is forgiven, the employer is no longer eligible to defer deposit and payment of the employer’s portion of FICA tax due after that date. However, the amount of the deposit and payment of the employer’s portion of FICA tax that was deferred through the date that the PPP loan is forgiven continues to be deferred and will be due on the applicable dates listed above.

Additional Information on the Deferral of Employer Social Security Taxes can be found at:

FAQs: Deferral of employment tax deposits and payments under the CARES Act:
     Deferral of employment tax deposits and payments through December 31, 2020

This information is only a brief summary and provided as a courtesy to assist in your understanding of the subject matter covered and on the impact of certain regulatory requirements and should not be construed as tax or legal advice. Such information is by nature subject to revision and may not be the most current information available.

Consult experienced counsel and/or tax advisors for legal advice prior to implementing any credit strategies related to COVID-19 relief efforts.
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