The Internal Revenue Service is sending notices to taxpayers who deferred their Social Security taxes last year, warning them that half the taxes will be due by the end of this year.
In an email to payroll professionals Friday, the IRS said that it’s sending informational-only
The payroll tax deferral helped taxpayers who found they desperately needed funds to pay their regular expenses during the first year of the pandemic. However, many tax professionals advised their clients that the taxes would eventually come due. The payroll tax relief in the CARES Act for employers differed from the payroll tax holiday that former President Trump issued by executive order in August of last year for employees, which required repayment of the deferred taxes by the end of April 2021. Federal government employees and members of the military were automatically subject to that payroll tax holiday, but most taxpayers and companies avoided opting for it last year, knowing the taxes would eventually have to be paid.
“The CARES Act allowed these types of taxpayers to defer the payment of certain Social Security taxes on their Form 1040 for tax year 2020 over the next two years,” said the IRS. “Half of the deferred Social Security tax is due by Dec. 31, 2021, and the remainder is due by Dec. 31, 2022.”
The IRS said it would continue to issue these courtesy notices before each installment is due, but no response is needed.
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