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Employers and Self-employed Who Elected to Defer 2020 Social Security Tax, The Payments Are Due Jan. 3

Article Highlights:

  • 2020 COVID Social Security Tax Deferral Relief

  • IRS Payment Reminder

  • Repayment Due Date

  • How to Make Repayment of the Deferred Amounts

As part of the COVID relief provided during 2020, employers and self-employed people could choose to put off paying the employer’s share of their eligible Social Security tax liability, normally 6.2% of wages. Half of that deferral is now due on Jan. 3, 2022, and the other half on Jan. 3, 2023.

Reminder - If you are an employer or self-employed and chose to defer paying part of your 2020 Social Security tax obligation you should have received a reminder from the IRS reminding you that the first payment is due January 3, 2022. Even if you did not receive a reminder from the IRS, you are still responsible for making the payment on time, even if you did not receive a bill.

How to Repay Deferred Taxes - Employers and individuals can make the deferral payments through the Electronic Federal Tax Payment System or by credit or debit card, money order or with a check. To be sure these payments are credited properly, they must be made separately from other tax payments.

EFTPS has an option to make a deferral payment. On the Tax Type Selection screen, choose Deferred Social Security Tax and then change the date to the applicable tax period (typically, the calendar quarter in 2020 for which tax was deferred). Visit EFTPS.gov, or call 800-555-4477 or 800-733-4829 for details. Individual taxpayers can also use Direct Pay, available only on IRS.gov. Select the "balance due” reason for payment. If paying with a debit or credit card, select "installment agreement." Apply the payment to the 2020 tax year where the payment was deferred.

If you owe deferred 2020 deferred Social Security tax payments and have questions about how to make the payment, please give this office a call.

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If you received a notice or letter from the IRS or Oklahoma Tax Commission, keep it available. That document usually tells us what the agency is requesting, the deadlines involved, and what information we may need next.

What Happens Next?

Our staff will first gather some basic information and determine whether the matter is something our firm can assist with.

If appropriate, the next step is a paid one-hour strategy meeting with former IRS Revenue Agent, Austin Murray, CPA. During that meeting, we review the notices and relevant records in detail and discuss the available options.

If you engage Millennial Accounting for representation, the consultation fee is applied toward the representation retainer.

Helpful Documents to Have Available

  • IRS or Oklahoma Tax Commission notices

  • Prior tax returns

  • Accounting or payroll records

  • Previous correspondence with the taxing agency

  • Any documents specifically requested in the notice

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