By: Stephanie Salmon, CPA

In addition to the credits allowed for sick leave for employees discussed in last month’s newsletter titled “Tax Breaks Help Small and Medium-sized Employers” and “Employee Retention Credit Could Help Your Business” article included in this newsletter, there is an additional payroll tax provision in the CARES Act that can generate cash now. This program is only if your business did not receive SBA PPP or EIDL loans under the CARES act.

Payroll tax payment delay

The CARES act includes a provision that allows employers and self-employed workers to delay payment of employer payroll taxes where 50% of the 2020 employer payroll tax deferral will be due Dec. 31, 2021; the other 50% will be due Dec. 31, 2022. The same provision applies for self-employment taxes. Keep in mind that the delay of employer payroll tax payments is optional. The deferral is not available to employers who receive forgiveness of a Small Business Act loan under any other CARES Act provisions (PPP or EIDL).