Pub. 2 2020 Issue 4

M A Y / J U N E 2 0 2 0 18 nebraska cpas BUSINESS INSIDER EMPLOYER PAYROLL TAX DELAY CAN HELP CASH-STRAPPED BUSINESSES BY SHARON KREIDER , CPA The employer’s share of Social Security tax (but not Medicare tax) can be delayed and paid over two years. Many business clients may not know that the deferral applies to: • Self-employed individuals, and • Recipients of Paycheck Protection Program (PPP) loans, but only until the date of PPP loan forgiveness. Employer Payroll Tax Delay Employers must withhold Social Security taxes on employee wages. Self-employed individuals are subject to self-employment tax. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, taxpayers are allowed to defer paying the 6.2% employer share of the Social Security tax (but not the 1.45% employer share of the Medicare tax) through the end of 2020. The tax is payable over the following two years with half paid by December 31, 2021, and the other half by December 31, 2022. Deferral Period The deferral applies to deposits and payments of the employer’s share of Social Security tax that would otherwise be