On April 10, 2020, the IRS released guidance in the form of an FAQ regarding the ability of employers to delay payment of certain payroll taxes.
Under Section 2302 of the CARES Act, employers can delay payment of the employer’s share of social security taxes (6.2%) otherwise required to be paid during the period beginning on March 27, 2020, and ending December 31, 2020. Half of the delayed payroll taxes will be due by December 31, 2021, with the other half due by December 31, 2022.
The same deferral extends to (a) 50% of the social security taxes imposed under the Self-Employed Contributions Act (6.2%) and (b) employment tax imposed on employers under the Railroad Retirement Tax Act (6.2%).
The IRS guidance clarified a few aspects of the deferral for employers:
Click here for further explanation of the payroll tax deferral, as well as other tax provisions of the CARES Act affecting taxes. Foley has created a multi-disciplinary and multi-jurisdictional team, which has prepared a wealth of topical client resources and is prepared to help our clients meet the legal and business challenges that the coronavirus outbreak is creating for stakeholders across a range of industries. Click here for Foley’s Coronavirus Resource Center to stay apprised of relevant developments, insights and resources to support your business during this challenging time. To receive this content directly in your inbox, click here and submit the form.