Deferred Social Security Tax Payment Due by End of Year, IRS Warns
Written by
Vance Cariaga
Edited by
Rikki Elliot
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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.
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.
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.
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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