CARES Act: Delayed Payment of Employer Payroll Taxes

In order to free up employers’ cash flow and retain employees during times of quarantine or shutdown, the CARES Act defers the payment of the employer share of payroll taxes.

The FICA taxes are imposed on both the employer and the employee at a rate of 6.2 percent for OASDI and 1.45 percent for HI for a total of 7.65 percent for the employee and 7.65 for the employer (15.3 percent total).  Only the employer portion of Social Security and Medicare payroll tax may be deferred.

Payroll taxes due from the period beginning on the date the CARES Act is signed into law and ending on December 31, 2020, can be deferred. The total payroll taxes incurred by employers, and 50 percent of payroll taxes incurred by self-employed persons qualify for the deferral. Half of the deferred payroll taxes are due on December 31, 2021, with the remainder due on December 31, 2022.

Cherina DK Hart, CPA 8925 SE Morgan Lane McMinnville, OR 97128 503-434-9767 503-474-0253 fax