All employers are now allowed to defer the employer portion of social security tax beginning with deposits and payments due on or after March 27, 2020 and before January 1, 2021 as part of the Paycheck Protection Program Flexibility Act signed by the President on June 5th.
Previously, any employer that received a PPP loan could only defer the employer portion of social security tax through the date they received a decision from the lender that their loan was forgiven.
Employers will be required to pay one-half of the deferred amount by December 31, 2021 and the remainder is due by December 31, 2022. Employers can’t defer tax that has already been paid. However, an employer can consider prior deposits during the quarter as first being deposited for employment taxes other than the employer share of the social security tax, but an employer will not be able to receive a refund or credit due to the employer portion of social security tax that was already deposited and paid. The amount deferred will be reported on the updated Form 941.
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