President Trump signed into law H.R. 7010, the “Paycheck Protection Program Flexibility Act of 2020,” on June 5, which modifies certain provisions related to forgiveness of loans under the Paycheck Protection Program and allows loan forgiveness recipients to defer their payroll taxes, according to the White House.
For payroll taxes due from March 27 through the end of 2020, employers and self-employed individuals may defer payment of the employer share of Social Security taxes they are responsible for paying, NAHB reports. This allows employers and those who are self-employed to save temporarily on the employer’s 6.2 percent Social Security tax on wages. Employees must continue to submit their portion of the Social Security tax.
Businesses should view this as an interest-free loan, as these delayed taxes must be repaid. Half of the deferred amount is due by Dec. 31, 2021. The balance is due by Dec. 31, 2022.