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Level 2

Question

Cares Act Section 2302

Forum|Forum|4 years ago
August 5, 2021
12 replies
3 views

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.

TurboTax Self Employed Online

KochuK

Level 7

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.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

TreacyAuthor

Level 2

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

Level 2

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

MadiHerm

Level 2

@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

Level 15

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-social-security-tax

And see (starting with question 18)

https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-2020

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-had-deferred-175-from-2020-something-from-cares-act-i-didn/00/2342743

jfirko

Level 2

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

Level 2

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

kc311

Level 2

This same thing happened to me. I have been using TT for about 30 years, and the last 2 years have been a nightmare. I definitely do not remember the questions listed and I am pissed. I reviewed my taxes for 2019, and the amount listed for Self-Employment tax is less, and on 2020, it shows more than 2019, but now they say I owe the half of taxes. I'm not sure i follow this logic. Any additional help would be greatly appreciated.

Sac Clemente, CA

TAS2021

Level 2

I am certain I did not select any deferral of self-employment taxes due. And yet I received this letter as well.

Turbo Tax customer service is requested immediately. This deferred due amount should be liable by Turbo Tax for bad information.

xmasbaby0

Level 15

@TAS2021 If you want to talk to customer support you have to contact them. We do not arrange that from the user forum for you.

To call TurboTax customer support

https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number

Customer support is available from 5 a.m. to 5 p.m. Pacific time Monday-Friday.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Jeep-132213

Level 2

The installed version, not the online version, absolutely defaulted to the max deferral without verifying it with you. I also received an IRS letter and went back to my Turbotax to figure out what happened. The section about this deferral *now* asks you (likely an update). In my saved tax return, there is NO ANSWER as it never asked me and the amount it deferred is the full amount, by default.

In fact if I go back into that section and just click 'continue' without answer yes/no, it still defers the full amount. That's a nasty bug for all of us not expecting a several thousand dollar IRS bill.... thanks turbotax...

Tlk2j

Level 2

How do I double check this? I do not see where I would owe thi? ggrrrr

VolvoGirl

Level 15

@Tlk2j Are you looking to see if you owe the Self Employed Tax Deferral? SE Tax deferral is on Schedule 1 line 12e and goes to 1040 line 13.

Critter-3

Level 15

The interview walked you thru this election to defer the taxes ... nothing was done without your approval. If you did not want to defer the SE taxes then just pay them now in full or pay 1/2 now and 1/2 later either way you are going to make the payment.

curly63

Level 2

Where would this deferment choice show up in forms? I too would not have chosen to defer a payment and would like to find this in my 2020 forms.

Thank you!

Critter-3

Level 15

The deferred tax appears as a refundable credit on Schedule 3 line 12e, "Deferral for certain Schedule H or SE filers." It was subtracted from the tax you had to pay with your tax return. You have to pay half the deferred tax by December 31, 2021 (the end of this month), and the remainder by December 31, 2022.

marady

Level 2

There is a glitch in your programming from 2020. I NEVER saw or answered ANY of those questions during my 2020 taxes. I have used TurboTax for over five years and am very familiar with the questions. I did NOT overlook these questions. These questions never popped up during my tax preparation at all. I will no longer be using Turbo Tax in the future as a result of this, and additional glitches in your programming.

Critter-3

Level 15

Glitch or not it happened and 1/2 the deferred taxes are due now with the other 1/2 due next December.

jimswinder

Level 3

I do not pay $100 for a service that has glitches and no communication from Turbo Tax about said glitch...that is the whole point critter...not that we owe the money.

TuckerdogAVL

Level 6

Where do I enter the deferred payment that I paid in August 2021 that was due from 2020.

JamesG1

Level 15

The self employment tax deferral on the 2020 Federal 1040 tax return was to be paid back as explained here.

But the payment is not an entry on the 2021 Federal 1040 tax return.

Section 2302 of the CARES Act allowed businesses to elect to defer the employer's share of Social Security tax on wages paid to employees between April 1 and Dec. 31, 2020.

@TuckerdogAVL

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myonlineid

Level 2

If I understood your response correctly, the deferred payment of the employer's share of Social Security tax (Cares Action Section 2302) for the self-employed doesn't have an impact on the 2021 tax return?

Thanks