How can we help?

Repaying deferred taxes (employee and employer)

If your company deferred taxes through Gusto during 2020, you're responsible for repaying these amounts to the IRS directly. 

 

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:

  • December 31, 2021: 50% of eligible deferred amount
  • December 31, 2022: the remaining amount

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 a reminder notice to employers before each applicable due date. To determine the amount of tax due for the period, each return period is treated separately — so 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:

  • Click the Reports section
  • Select Tax Deferrals from the options under the Summary Reports tab

You can also review it by downloading form 941 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. 

Tips on repaying by EETPS: 

  • If you're an employer that currently files Form 941: select Form 941, the calendar quarter in 2020 to which your payment relates, and payment due on the IRS notice.
  • If you're an employer that files annual returns, like the Form 943, 944, or CT-1: select the return and 2020 tax year to make a 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.

 

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

For more information about EFTPS, visit our Help Center.

Payroll, benefits, HR and more.