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Employer Payroll Tax Deferral and the Payroll Protection Program (PPP) Loan

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Employers who have received a PPP loan, but whose loan has not yet been forgiven, may defer deposit and payment of the employer’s share of social security tax (does not include employer’s share of Medicare tax) that otherwise would be required to be made beginning on March 27, 2020 through the date the lender issues a decision to forgive the loan, without incurring failure to deposit and failure to pay 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 share of social security tax due after that date. However, the amount of the deposit and payment of the employer’s share of social security 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.”

The deferred deposits of the employer’s share of social security tax must be deposited by the following dates (referred to as the “applicable dates”) to be treated as timely (and avoid a failure to deposit penalty):

  1. On December 31, 2021, 50 percent of the deferred amount; and
  2. On December 31, 2022, the remaining amount.

PLEASE CONTACT YOUR PAYROLL PROVIDER TO DEFER THESE PAYROLL TAXES.

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