A question was recently posed regarding an employer’s ability to defer payment of Social Security taxes, if they receive a Payroll Protection Program (PPP) loan.
According to the IRS, employers who have a received a PPP loan, but whose loan has not yet been forgiven, may defer deposit and payment of the employer’s share of social security tax that otherwise would be required to be made beginning on March 27, 2020, through the date the lender issues a decision to forgive the loan, without incurring failure to deposit and failure to pay penalties.
Once an employer receives a decision from its lender that its PPP loan is forgiven, the employer is no longer eligible to defer deposit and payment of the employer’s share of social security tax due after that date. However, the amount of the deposit and payment of the employer’s share of social security tax that was deferred through the date that the PPP loan is forgiven continues to be deferred and will be due on the “applicable dates,” as described in FAQs 7 and 8 in this IRS list of FAQs regarding deferral of employment tax deposits and payments.
Please contact your HW&Co. advisor with any questions you may have.
