On Friday, April 10th, the IRS released an FAQ for Deferral of Employment Tax Deposits and Payments as relief during the COVID-19 pandemic. These FAQs address specific issues related to the CARES Act, which allows employers to defer the deposit and payment of the employer’s share of social security taxes and self-employed individuals to defer payment of certain self-employment taxes through December 31, 2020.

one-dollar bills scattered across the floor; image used for blog post about employee tax deferrals relief during COVID-19 pandemic

It is important to note that employers who have received a Paycheck Protection Program (PPP) loan, but whose loan has not yet been forgiven, may defer deposit and payment. However, 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.

Further, 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 becomes 50% payable by December 31, 2021 and the remaining 50% by December 31, 2022.

If you have questions about how this IRS announcement applies to your tax situation, please connect with your PKF Texas tax team members.

Del Walker, CPA | Director, Tax Practice Leader
DWalker@PKFTexas.com | (713) 860-1420

Martin Euson, JD | Director, Tax
MEuson@PKFTexas.com | (713) 860-5436

Frank Landreneau, CPA | Director, International Tax
FLandreneau@PKFTexas.com | (713) 860-1429

Rafael Carsalade, CPA | Director, International Tax
RCarsalade@PKFTexas.com | (713) 860-5412

Nikki Homratsamy, CPA | Director, Tax
NHomratsamy@PKFTexas.com | (713) 860-5425

Jim Streets, CPA | Director, Tax
JStreets@PKFTexas.com | (713) 860-5440

Gary Voth, CPA, JD | Director, Tax
GVoth@PKFTexas.com | (713) 860-1410

For additional information related to COVID-19, we are keeping PKFTexas.com/COVID-19 up-to-date with information and resources to assist you as we all navigate these quickly-changing times.