Repay deferred taxes from 2020

If your company deferred taxes through Gusto during 2020:

  1. Make sure you're familiar with all the information and resources we provide below. 
  2. Learn more about the agency notice you received and how to repay the taxes here—FAQs included. 
  3. Repay the amounts to the IRS directly using the EFTPS—you can learn more about the EFTPS in this article by scrolling to the applicable dropdown.

Deferred company taxes

What is the due date for repayment? 

The deferred deposits of the employer's share of Social Security tax must be deposited by the following dates (referred to as the "applicable dates") to be treated as timely, and therefore avoid a failure to deposit penalty:

If an employer pays any amount before the applicable dates, however, that amount is first applied to reduce the employer's liability for the amount due on December 31, 2021, then to the amount due on December 31, 2022.

What's the process for repayment?

The IRS will send reminder notices starting in October 2021 to employers before each applicable due date. To determine the amount of tax due for the period, each return period is treated separately.

This means Form 941 filers that deferred in all four quarters of 2020 may receive four reminder notices stating the deferred amounts that are due on the applicable dates in 2021 and 2022, even though the amounts for all four quarters will have the same due dates of December 31, 2021 and December 31, 2022.

Can I check how much was deferred in 2020?

Review your deferred totals by following these steps:

  1. Click the Reports section.
  2. Select Tax Deferrals from the options under the "Summary Reports" tab.
    • Important: the amounts listed in these reports may not exactly match what the IRS shows as due and payable. If the amount on the IRS notice does not match the amount on the Gusto report, it's important that you pay the full amount on the IRS notice. Failure to do so may result in penalties and interest.

You can also review how much was deferred in 2020 by downloading form 941 from the Documents section and checking the amount in Line 13b.

Can I repay before the due date? 

You can—employers can pay the amount they owe electronically using EFTPS (preferred method), by credit or debit card, or by a check or money order. 

The EFTPS system has a new option for deferral payments—use the guidance below and the IRS instructions to repay the deferred taxes.

Within the EFTPS portal, select "Deferral payment" and then change the date to the applicable tax period for the payment:

For more information, visit EFTPS.gov, or call (800) 555-4477 or (800) 733-4829 (TDD).

Deferred employee taxes

Gusto did not process deferred taxes for employees in 2020. It is the employer's responsibility to repay deferred tax amounts back to the IRS once the deferment period ends, even if they haven’t collected the taxes from their employees. 

When is the due date for this payment? 

The due date for Applicable Tax repayment has been extended from April 30, 2021, to December 31, 2021. Any associated interest, penalties, and additions to tax for late payment (with respect to any unpaid Applicable Taxes) will begin to accrue on January 1, 2022.

Still need help?

For more information, visit the IRS website which includes Frequently Asked Questions for these government programs. 

For more information about EFTPS, visit the EFTPS dropdown in this article.