How to repay deferred employer social security taxes

If you opted into the Employer Social Security Deferral program in 2020, the IRS requires you to repay at least 50% of the deferred amount by December 31, 2021. You're responsible for depositing repayment to the IRS directly, and will find helpful IRS links and information about finding the deferral in Wave Payroll in this guide

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Which employers need to repay social security?

If you deferred employer social security amounts under the Social Security Tax Deferral relief program introduced in March 2020 (part of the Coronavirus Aid, Relief, and Economic Security or CARES Act), you must repay deferred Social Security. Learn more in the IRS Guide: What employers need to know about repayment of deferred payroll taxes

Employers are responsible for depositing repayments to the IRS directly. Employers will be able to record the repayment within their Wave Payroll account in the near future.

The IRS has not yet released any reporting requirements for deferred employer social security taxes. Wave continues to monitor IRS guidance regarding whether these amounts will need to be reported on forms produced as part of payroll tax payments and filings.

Not sure if you opted in? Check in your Wave Payroll account!

Follow the instructions below to view the total amount of deferred employer social security tax. Any amount greater than $0 means you have deferred employer Social Security and are responsible for making repayments to the IRS.

When is repayment due?

December 31, 2021: 50% of the deferred employer social security amount
December 31, 2022: The remaining 50% of the deferred employer social security amount

Repayment due dates are found in Section 2302 of the CARES Act.

Employers can repay deferred social security taxes before the specified due dates. If you make a repayment before the due dates, the amount is applied to the amount due on December 31, 2021. If the amount due December 31, 2021 has been paid, the payment is then applied to the amount due on December 31, 2022.

How to find the amount you deferred in 2020

View the total amount of deferred employer social security tax

  1. Under Payroll > Select COVID-19
  2. See Relief options > Tax deferrals
  3. Locate Social security tax deferral

View deferred employer social security tax by pay period

  1. Under Payroll > Click Taxes
  2. Click Accumulating
  3. Locate CARES Act Social Security Tax Deferral
  4. Click the arrow to the right of the amount due for a breakdown by pay period

Deferred social security taxes are also reported on IRS Form 941:

  • On 2020 Form 941, Quarter 3 (July-September) Line 13b reports the employer share of Social Security tax deferred for the quarter
  • On 2020 Form 941, Quarter 4 (October-December) Line 13b reports the combined amount of employer and employee Social Security tax that was deferred

How to repay deferred taxes

The IRS is in the process of sending reminder notices to employers regarding deferred taxes. To identify the amount of tax due, each return period is treated separately. This means quarterly Form 941 filers will receive a reminder notice for each quarter in which taxes were deferred.

Follow the instructions outlined by the IRS in What employers need to know about repayment of deferred payroll taxes to deposit your repayments via EFTPS, or another IRS payment method.

EFTPS Tips

If you filed Form 941 in 2020, to make a repayment via EFTPS you will select Form 941, the 2020 calendar quarter the deferral was accrued in, and the payment amount. If you filed an annual Form 944, select Form 940 and 2020.

Not sure where to start?
Learn how to enroll in the Electronic Federal Tax Payment System (EFTPS)

FAQ

Will Wave make the repayments?

No. Wave is not able to submit social security repayments to the IRS for employee or employer deferrals. You, as the employer, are responsible for submitting repayments according to the 2021 and 2022 due dates.

Am I able to repay before the due dates?

Yes. Employers can repay deferred social security taxes before the specified due dates. More details about repayment due dates can be found above in When is repayment due.

I received a notice from the IRS about my repayments.

The notice is informational, confirming that the IRS is aware you deferred the employer share of social security taxes in 2020. They will confirm the remaining amount at the date of the notice and the due dates to adhere to. Immediate action isn’t required, unless you wish to repay the deferred taxes early, then you can take the steps outlined above in How to repay deferred taxes.

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