Deferred Social Security Tax Payment Due by End of Year, IRS Warns

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If you deferred paying part of your 2020 Social Security tax liability due to COVID-19 relief efforts, you don’t have much time left to pay the rest. The IRS this week issued a reminder that employers and self-employed individuals need to pay the second part of the deferred amount by Dec. 31, 2022.

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The deferred payments were part of federal government programs designed to provide financial relief during the pandemic. Employers could choose to put off paying the employer’s share of their Social Security tax liability, which is 6.2% of wages. Self-employed workers could choose to defer a similar amount of their self-employment tax.

Half of that deferral was due on Dec. 31, 2021, with the other half due a year later. However, as GOBankingRates reported previously, payments submitted by Jan, 3, 2023 will be considered timely because Dec. 31, 2022 falls on a Saturday. Taxpayers can also pay the deferred amount at any time before the due date.

The IRS sent reminder notices earlier this fall to affected employers and self-employed individuals. But even if you didn’t receive the notice for whatever reason, you’re still responsible for making the payment on time.

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There are a few different options for making the deferral payment. It can be made through the Electronic Federal Tax Payment System, Direct Pay, by debit card, credit card or digital wallet or with a check or money order. No matter which payment you choose, it must be made separately from other tax payments and deposits. This will ensure that it’s credited properly and will help you avoid follow-up bills or notices.

Here’s a quick look at the different payment options.

EFTPS

The Electronic Federal Tax Payment System is a free service available from the U.S. Treasury Department. After you enroll, you’ll go to the “Tax Type Selection” screen and choose “Deferred Social Security Tax” and then change the date to the applicable tax period (the calendar quarter in 2020 for which tax was deferred). For further details, visit EFTPS.gov or call 800-555-4477 or 800-733-4829.

Direct Pay

If you are self-employed, you can choose Direct Pay to pay directly from a checking or savings account. This service is available free on Direct Pay With Bank Account. Select “Balance Due” as the reason for payment and apply the payment to the 2020 tax year. Direct Pay is not available to pay employment taxes.

Make Your Money Work

Debit Card, Credit Card or Digital Wallet

If you want to pay by one of these options, you will need to select “installment agreement.” Apply the payment to the 2020 tax year. The IRS doesn’t charge a fee for this service, but the authorized third-party payment processors do. Visit IRS.gov/payments for details.

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Check or Money Order

If you choose to pay by check or money order, it must be payable to United States Treasury, not IRS. For more information on where to mail payments see Instructions for Form 941.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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