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gus4113
Level 2

Employment tax deferral while on installment agreement

Would taking the employment tax deferral for 2020 risk any kind of default with an existing installment agreement?

 

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

2 Replies
ErnieS0
Expert Alumni

Employment tax deferral while on installment agreement

No. The IRS says, "For any taxable year that includes any part of the payroll tax deferral period, 50 percent of the Social Security tax imposed on net earnings from self-employment attributable to the payroll tax deferral is not used to calculate the installments of estimated tax due under section 6654 of the Internal Revenue Code. This means that self-employed individuals that defer payment of 50 percent of Social Security tax on their net earnings from self-employment attributable to the period beginning on March 27, 2020, and ending on December 31, 2020, may reduce their estimated tax payments by 50 percent of the Social Security tax due for that period."

 

Refer to Deferral of employment tax deposits and payments through December 31, 2020

 

For relief see IRS makes it easier to set up payment agreements; offers other relief to taxpayers struggling with t...

gus4113
Level 2

Employment tax deferral while on installment agreement

Thanks, just to clarify, the deferral wouldn't be see as an additional balance (I think this is a condition that would default an existing installment agreement)?

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