Will Social Security payroll taxes deferred in 2020 have to be repaid?
- October 6, 2020
- David Greene
- Comments Off on Will Social Security payroll taxes deferred in 2020 have to be repaid?
This new memo from our president concerning deferring certain payroll taxes, which was issued in August 2020, is still being implemented, so the answer is not clear. However, at this time, the taxes deferred in 2020 will have to be paid during the period January through April 2021. This deferral is for the employee’s portion of the Social Security tax (6.2%) but not the Medicare tax or federal withholding tax. It applies to taxes withheld from September 1 through December 31, 2020. Also, it only applies to employees whose equivalent bi-weekly gross wages are less than $4,000. The program is voluntary, not mandatory, so you can continue to allow your employer to withhold the Social Security taxes and forward them to the IRS as usual. That way you will not have to worry about paying double Social Security taxes in 2021. The deferred taxes will begin to accrue interest and penalties if not paid by May 1, 2021.