If you’re a household employer or self-employed and chose to defer paying some Social Security taxes under the CARES Act the deferred Social Security taxes are due by December 31, 2021 and December 31, 2022. If you also deferred the employee share of Social Security taxes the balance is included in the installment amount due by December 31, 2021.
You should have received a CP256V Notice in the mail. The notice is for informational purposes only and there is no need to respond.
You’ll need to pay your current installment amount by the due date shown on the notice. The notice may not reflect recent payments, but they will still be recorded correctly on your account.
Review your tax return for the tax period in which you deferred Social Security taxes and subtract any payments you’ve made. Compare that figure with the amounts shown on your notice. If you discover an error, please contact the IRS at the telephone number shown on the notice.
The first installment amount, due December 31, 2021, is half the employer’s share of Social Security taxes you could have deferred. It includes any amount of the employee’s share of Social Security taxes that were deferred minus all deposits and payments the IRS has already received. The second installment, due December 31, 2022, is the remaining unpaid deferred taxes.
If you cannot pay, you may be eligible for a payment plan or other payment options. However, taxpayers should be aware that if the IRS does not receive your payment by the applicable due dates, the deferred taxes may be subject to Failure to Deposit penalties and the full amount of your net tax liability may become due immediately.
Deferral payments can be made through the Electronic Federal Tax Payment System (EFTPS), by credit or debit card, or with a check or money order. These payments must be paid separately from other tax payments to ensure they’re applied to the deferred payroll tax balance. If you include a payment of deferred taxes with other tax payments (or send it as a deposit), the IRS systems won’t recognize the payment.
Questions? Don’t hesitate to call the office for assistance.
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, we would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.