APA's Top Payroll Questions & Answers for 2020 - 118

Special Supplement: COVID-19 - Questions & Answers

SPECIAL
SUPPLEMENT:
COVID-19

APA's Top Payroll Questions & Answers for 2020

Find out more about the CARES Act and its effect on the deposit
of employment taxes and other COVID-19-related relief in The Payroll
Source®, §8.2.

Deferral of employer social security tax under the
CARES Act for tax already paid

Q.

My company has decided to take advantage of the social security
tax payment deferral relief provided by the CARES Act in response to
COVID-19. We have already paid the biweekly tax deposits (including
the employer portion of social security tax) by the deposit due dates.
Can we still take advantage of the deferral April to December? Is that
handled on the new Form 941? Also, does it matter that our company
received a Paycheck Protection Program (PPP) loan that has been
forgiven?

A.

The deferral is accounted for on Line 13b of the Form 941 issued by
the IRS for use beginning with the second quarter of 2020. You can
take advantage of the deferral for your company's share of social
security tax going forward. However, you cannot defer tax that you have
already paid.
The maximum amount that can be deferred each quarter is
whichever of these is smaller:
*	 your company's share of social security tax; or
*	 the amount that Line 10 (total taxes after adjustments)
reduced by the amount on Line 11a (qualified small business
payroll tax credit for increasing research activities) exceeds
the amount on Line 13a (total deposits for the quarter)
The fact that your company received a PPP loan under the CARES
Act that has been forgiven does not affect your company's ability to
take advantage of the social security tax deferral. As first enacted, the
CARES Act would have prohibited it, but the PPP Flexibility Act, which
became law on June 5, 2020, removed that restriction. As a result, an
employer that receives a PPP loan is entitled to defer the payment and
deposit of the employer's share of Social Security tax, even if the loan

118



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APA's Top Payroll Questions & Answers for 2020

Table of Contents for the Digital Edition of APA's Top Payroll Questions & Answers for 2020

Table of Contents
APA's Top Payroll Questions & Answers for 2020 - Intro
APA's Top Payroll Questions & Answers for 2020 - Cover1
APA's Top Payroll Questions & Answers for 2020 - a
APA's Top Payroll Questions & Answers for 2020 - b
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APA's Top Payroll Questions & Answers for 2020 - Table of Contents
APA's Top Payroll Questions & Answers for 2020 - e
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