Did you know that a business can can elect to defer the employer portion of your social security tax even though they have applied for and/or received a PPP loan?
The IRS published updated guidance on this very question on April 09, 2020, click here to read the FAQ.
Before this FAQ was posted there was confusion as to whether one could apply for a PPP loan and take the CARES Act credit. Many people were taking a better safe then sorry approach, avoiding taking the CARES act deferral credit for fear of double dipping or disqualifying their company from a PPP loan.
Thankfully this new guidance makes it crystal clear that a business that applies for a PPP loan may can defer the employer’s share of Social Security tax until a decision has been reached by the lender as to whether forgiveness will be permitted. This gives every business the opportunity to defer at least eight weeks of Social Security tax that would have been owed over the coming weeks until the end of 2021 and 2022.
Read the CARES Act Social Security Deferment notice posted on April 06, 2020 to learn how we can setup and configure your payroll account for this deferment.