What this notice is about This was a reminder that Social Security taxes deferred under the CARES Act Section 2302 were due by December 31, 2021 and December 31, 2022. If you also deferred the employee share of Social Security taxes under Notice 2020-65, as modified by Notice 2021-11, the balance was included in the installment amount due by December 31, 2021. This notice was only issued prior to the two installment due dates. What you need to do Pay your current installment amount by the due date shown on the notice. Note: the notice may not reflect recent payments, but they will still be recorded correctly on your account. Review your tax return for the tax period in which you deferred Social Security taxes and subtract any payments you've made. Compare that figure with the amounts shown on your notice. If you discover an error, please contact us at the telephone number shown on the notice. What you need to know The first installment amount, which was due December 31, 2021, is half the employer's share of Social Security taxes you could have deferred (which includes any amount of the employee's share of Social Security taxes deferred under Notice 2020-65, as modified by Notice 2021-11) minus all deposits and payments we've received. For more information, please review Q&A 18 at IRS.gov/etd. The second installment, which was due December 31, 2022, is the remaining unpaid deferred taxes. Frequently asked questions Do I have to reply to this notice? No, this is a courtesy notice for your information only. We don't need a response. How do I make my repayment? You can make the deferral payments through the Electronic Federal Tax Payment System (EFTPS), by credit or debit card, or with a check or money order. Note: you must make these payments separate from other tax payments to ensure they're applied to the deferred payroll tax balance. IRS systems won't recognize the payment if it's with other tax payments or sent as a deposit. To make the deferred payment using EFTPS, select deferral payment and change the date to the applicable tax period for the payment. You can visit eftps.gov or call 800-555-4477 or 800-733-4829 for details. If the employee no longer works for the organization, you must repay the entire deferred amount of the employee's portion of Social Security tax then collect the employee's portion using your own recovery methods. How do I make a payment for a deferred amount on an aggregate return? (updated March 7, 2024) Third-party payers (such as an Internal Revenue Code Section 3504 agent, a certified professional employer organization, a non-certified professional employer organization, or other agents designated with Form 2678, Employer/Payer Appointment of Agent) file aggregate returns to show the employer's deferred tax. Employers should coordinate with their third-party payer to pay deferred taxes owed by the December 31, 2021, and December 31, 2022, due dates. This helps ensure the third party properly records the payment and the correct employer identification number (EIN) and tax period are noted with the payment so we can apply it properly. What if I cannot pay my deferred taxes? You may be eligible for a payment plan or other payment options. Note: if we don't receive your payment by the applicable due dates, the deferred taxes may be subject to Failure to Deposit penalties. When should I repay deferred taxes? The following table shows the schedule for repayment: If Then You're repaying the employee share of deferred Social Security taxes Deposit the deferred taxes ratably throughout the 2021 calendar year. You must repay the entire deferred tax by December 31, 2021. You're paying the first half of the eligible amount of the employer share of Social Security taxes Payment is due by December 31, 2021 You're paying the second half of employer deferred taxes Payment is due by December 31, 2022. Penalties and interest begin accruing on the day payments are due if they aren't timely paid. How third-party payers report client unpaid deferred tax from aggregate returns (updated March 7, 2024) Third-party payers who filed aggregate Form 941 or Form 943 need to report a client employer’s unpaid amount of deferred Social Security tax. The following information must be sent to the designated fax number: 844-255-1856 using either a fax machine or online fax service. Protect yourself when sending digital data by understanding the fax service’s privacy and security policies. Note: This fax line is designated to receive information from third-party payers who need to report their client employers’ unpaid, deferred amount of Social Security tax. The IRS will not process other documents sent to this fax line. Third-party payer cover sheet with a contact name and number. Copy of Schedule R (Form 941/943) for each relevant employer and tax period. Employer name, employer identification number (EIN), and current address. Total employer deferred tax for each tax period. Total employer unpaid, deferred tax for each tax period, according to third-party payer records. List of deferred tax payments the employer made to the third-party payer (dates and amounts) per tax period. If applicable, date client separated from the third-party payer. A name and contact number within the third-party payer office who may assist with clarification of the information provided above. Once you submit the information, please allow time for the IRS to analyze the information and take the necessary actions. Third-party payers will receive one notice of a tax decrease for the total unpaid deferred tax that was moved to their client employers’ accounts. The table below provides the actions associated with each scenario involving third-party payers and their client employers’ unpaid deferred Social Security tax. IF… AND… THEN… The common law employer (CLE) client fully paid their deferred amount of Social Security tax The payment was applied to their third-party payers (TPP) employer identification number (EIN) for the period in which the tax was deferred No additional actions are required. The CLE client fully paid their deferred amount of Social Security tax The payment was applied to the CLE’s own EIN for the period in which the tax was deferred IRS will transfer the payments from the CLE’s account to their TPP’s account. The CLE client partially paid their deferred amount of Social Security tax The payment was applied to the CLE’s own EIN for the period in which the tax was deferred IRS will associate the CLE’s deferred amounts of Social Security tax from the TPP’s account (EIN/tax period) to the CLE’s account (EIN/tax period) in the form of an assessment against the CLE and a reduction of tax for the TPP. IRS will pursue the unpaid, deferred amount of Social Security tax directly from the CLE. The CLE client has not paid their deferred amount of Social Security tax The TPP reported the CLE’s total deferred amount of Social Security tax on their aggregate tax return (Form 941 and/or Form 943) IRS will associate the CLE’s deferred amounts of Social Security tax from the TPP’s account (EIN/tax period) to the CLE’s account (EIN/tax period) in the form of an assessment against the CLE and a reduction of tax for the TPP. IRS will pursue the unpaid, deferred amount of Social Security tax directly from the CLE. The CLE client overpaid their deferred amount of Social Security tax The payment was applied to the CLE’s own EIN for the period in which the tax was deferred IRS will associate the CLE’s deferred amounts of Social Security tax from the TPP’s account (EIN/tax period) to the CLE’s account (EIN/tax period) in the form of an assessment against the CLE and a reduction of tax for the TPP. IRS will refund any remaining overpayment directly to the CLE. Helpful information Publication 15, (Circular E) Employers Tax Guide PDF Publication 594, The IRS Collection Process PDF Publication 4169, Tax Professional Guide to the Electronic Federal Tax Payment System PDF Form 9465, Installment Agreement Request PDF Notice 746, Information About Your Notice, Penalty and Interest PDF What employers need to know about repayment of deferred payroll taxes Reference tools Publication 1, Your Rights as a Taxpayer Full list of tax forms and instructions Need help? You can authorize someone to contact the IRS on your behalf. If you can’t find what you need online, call the IRS number at the top of your notice or letter.
