Self-Employed and Household Employers: How to Repay Deferred Social Security Taxes

As part of coronavirus relief legislation, self-employed individuals and household employers were allowed to defer the payment of certain Social Security taxes for the tax year 2020 over two calendar years. Half of this tax is due by the end of this year – December 31, 2021; with the other half due by December 31, 2022.

You can pay this deferred amount anytime before the due date either through the Electronic Tax Payment System (EFTPS), by credit or debit card, or through your bank account. More information about each of these payment methods can be found by clicking here.

When you make these payments, be sure they’re separate from any other tax payments to ensure they’re credited to the appropriate account. Also, be sure to designate them as “deferred Social Security tax”.

If paying through EFTPS, select “1040 US Individual Income Tax Returns” and “deferred Social Security tax” for the type of payment. Apply the payment to the 2020 tax year.

If you’re paying with a credit or debit card, select the reason for the payment as “balance due”, choose “installment agreement”, and apply the payment to the 2020 tax year.

If you’re not able to pay the full deferred tax amount, pay whatever you are able in order to reduce the applicable penalty and interest charges. If you don’t pay the full amount, you’ll receive a balance due notice from the IRS – follow the instructions in that notice to make a payment or apply for a payment plan.

If you have questions regarding these payments, please contact your tax professional.