| Employers are responsible for withholding Social Security and Medicare payroll taxes from their employees’ paychecks and paying these taxes along with the employer’s share to the IRS each month. The Social Security tax is 12.4% total, with 6.2% withheld from the employee’s wages and the employer paying 6.2%. The Medicare tax is 2.9%, with 1.45% withheld from the employee’s wages and the employer paying 1.45%. As part of aid to businesses provided in the Coronavirus Aid, Relief and Economic Security Act (CARES Act), employers can defer depositing the employer’s share of Social Security taxes until December 2021. For payroll periods starting March 27th through the end of this year, employers may defer their share of the Social Security tax (6.2%) and not deposit it with the IRS. Instead of depositing the usual amount of payroll tax, employers can simply hold back their portion of the Social Security tax each month and use it for other operating expenses. *Please note this only applies to the employer’s portion of the Social Security tax. Employers may not defer the employee’s part of the Social Security tax, and employers must still deposit both the employee’s and the employer’s portion of the Medicare tax each month. Employers who decide to defer their part of the Social Security tax have until the end of next year to start depositing the amount they deferred. Half of the deferred payroll tax amount must be deposited with the IRS on December 31, 2021, with the other half due by December 31, 2022. All employers may take advantage of this payroll tax deferral, including employers who have received a Paycheck Protection Program (PPP) loan. Employers who receive a PPP loan may defer the employer’s portion of Social Security taxes until the date their PPP loan is forgiven. Once an employer receives a decision from its bank that its PPP loan has been forgiven, the employer is no longer eligible to defer payroll taxes. However, the employer can still wait until December 31, 2021 to deposit the first half of the payroll taxes they deferred prior to the date their PPP loan was forgiven. The second half is due December 31, 2022. For more information from the IRS about payroll tax deferral, please click here. This payroll tax deferral is not the same as the payroll tax credits that employers may take for providing paid leave to employees or the employee retention credit. The IRS has detailed information about these credits here. If you have questions, you can contact us at fuba@fuba.org. For small business resources on the coronavirus, please visit fuba.org/coronavirus-resources.    You are receiving this email because you are a member of FUBA. |
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Your home is one of your greatest assets and a significant long-term investment. As such, it’s vital to protect your home and its contents with
