Cares Act Section 2302

[Treacy]

Why did Turbotax automatically select to defer the employer's share of the Social Security tax for my self employment taxes? I use Turbotax as a tax preparation tool and trusted that I would be guided through the process. I never would have opted to defer a payment that would come due at a later date. Today I received a notice from the IRS stating that half of my deferral payment will be due by December 31, 2021.

[KochuK]

Hi Treacy, good day! 

In TurboTax Online,  Self-Employed version - Federal > Deductions and Credits > Tax relief related to COVID-19 > Self-employment tax deferral, there are specific questions that customer has to answer in order to activate the deferral.

Do you (or spouse) want more time to pay your self-employment tax?

If the answer is yes,  comes next question:

Whose eligibility should we check?

Enter your eligible self employment income.

Tell us how much you'd like to defer (as the program provides max deferral amount).

Once answered, the program provides a schedule of amounts due on 12/31/2021 and 12/31/2022 respectively.

Therefore, TurboTax does not automatically select to defer your self employment taxes due to the many required customer data entries.

If you still have questions, please call and have an agent examine the data entries with you. Thank you.

Hope the above helps.

[Treacy]

Thank you for the information. I will make sure to pay extra attention when I next file. I would not have elected to defer any of my taxes and must have misread the information.

[Nick Osbor]

I got the same thing and I am pretty I would not have chosen to defer payment or said yes to pay at a later date. I think there is glitch in the system. There's no way I'd choose to answer a question like that. Are you able to pull up my question history to confirm that's what I did. I usually go back through the questions on each section 2-3 times before I submit everything

[jimswinder]

Yep...happened to me too...got a letter yesterday from the IRS telling me my payment is due soon...I don't recall ever being asked those questions as I also had no reason to defer any payments...the kicker was that the letter from the IRS was addressed to myself AND my ex wife..we have been divorced for over 10 years!!!

[porterbrew]

Ugh same here. I, too, don't recall specifying that I'd like to defer payments. Nor did I see an indication about it upon reviewing and re-reviewing final documentation. Had I known, it's not a choice I would have made. My identity was stolen last year and I thought it was related to that incident but knowing it was due to an entry in turbotax (and knowing others had this same experience) then I can at least "somewhat" understand the issue at hand. So frustrating to be in this position now. Turbotax: do better next time! 

[MadiHerm]

@Treacy @Nick Osbor @jimswinder @porterbrew So glad I found this thread. Like all the others I too was very surprised to received the letter in the mail stating I had a payment due as I did not and would not have elected to defer when I filed. My question to each of you now is how/where did you go about making the payment? I have been search for hours on the how to make the payment and what the correct way to document the payment is. Any help is appreciated.

[VolvoGirl]

Individuals can pay the deferred amount any time on or before the due date. They:

• Can make payments through the Electronic Federal Tax Payment System or by credit or debit card, money order or with a check.
• Should be separate payments from other tax payments to ensure they are applied to the deferred tax balance on the tax year 2020 Form 1040 since IRS systems won't recognize the payment for deferred tax if it is with other tax payments or paid with the current Form 1040.
• Should designate the payment as "deferred Social Security tax."

Individuals making deferred Social Security tax payments in EFTPS should select 1040 US Individual Income Tax Returns and deferred Social Security tax for the type of payment. They must apply the payment to the 2020 tax year where they deferred the payment. Taxpayers can visit EFTPS.gov for details.

Check if you have a Schedule 3 line 12e which goes to 1040 line 13.

See 1040 instuctions page 104 for schedule 3 line 12e SE tax deferral

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

IRS self employment tax deferred info

https://www.irs.gov/newsroom/how-self-employed-individuals-and-household-employers-repay-deferred-so...

And see (starting with question 18)

https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-20...

See screen shots on this post by Critter

https://ttlc.intuit.com/community/after-you-file/discussion/i-got-an-irs-letter-3064c-stating-that-i...

[porterbrew]

@MadiHerm Sorry you're in the same boat.

I received a letter from the IRS that includes a voucher to mail my payment. The voucher references the "letter number" assigned to me and other info including my social#.

There's a sentence "If you need any forms, schedules, or publications mentioned in this letter, you can get them by visiting our website at www.irs.gov/forms-pubs or by calling toll-free at 800-TAX-FORM 800-829-3676.

Also there's a note that if you have questions, you can call 877-766-2161.

Hope that's helpful to you. Take care!

[porterbrew]

That's annoying. The phone number I posted for you, @MadiHerm, was removed. Sorry.. What gives turbo tax?!!!

[porterbrew]

@MadiHerm

I'm going to post the phone number using the first letters for you..

1-TPP-PMM-A1M1

Hope that makes sense!

[VolvoGirl]

Even though the number was removed the letters are still there.  Isn't it 800-TAX-FORM?

[porterbrew]

@VolvoGirl 

That phone number is for the forms. There's another phone number for questions. It got stripped out. 

[jfirko]

The exact same thing happened to me, I was just surprised to receive this notice from the IRS.  I think possibly as intuit continued to update the software maybe they added in more questions, but I do not remember being asked about deferring my taxes at all.  This is really annoying and I am sure for some people will be a real burden or hardship.  Why doesn't turbotax mention anything about this in the summary information, it let's you know about estimated taxes for the next year, but not that you are going to owe a bunch of money at the end of the year also???  I have used turbo tax for years, this was handled poorly.

[jfirko]

Oh, FYI, I did not use the online version, and I updated the software every time I got on.