As independent contractor I was able to defer part of my SS tax for 2020. It is due in Dec. 2021. How do I tell the IRS what the payment is for when I send it in?

[Bsch4477]

The IRS knows how much you deferred. See this article for information about payment 

https://tax-associates.com/blog/2021/07/how-to-repay-deferred-social-security-tax/

[rjs]

The IRS has not yet provided any instructions for how to pay the deferred tax. I would be hesitant to rely on instructions posted by a two-person tax preparation firm, with no official IRS source. The first payment is not due until December. I'm sure the IRS will provide instructions before then.

[Critter-3]

How to repay the deferred taxes. Employers can make the deferral payments through the Electronic Federal Tax Payment System or by credit or debit card, money order or with a check. These payments must be separate from other tax payments to ensure they applied to the deferred payroll tax balance.

https://www.irs.gov/newsroom/what-employers-need-to-know-about-repayment-of-deferred-payroll-taxes

[rjs]

@Critter-3  The IRS link that you posted is for employers to pay the deferred Social Security payroll tax that is owed by employees. The OP is asking how a self-employed person can pay deferred self-employment tax. But you prompted me to search the IRS web site. I found the following, which answers the OP's question and seems to be the source of the Tax Associates, Inc. post. This was just posted by the IRS a few days ago.

How self-employed individuals and household employers repay deferred Social Security tax

[mwarney]

It first glance it seems to answer the question but in fact this does not answer the OPs question at all.  The IRS notice tells you where to go to make the payment but does not tell you "how" to make the payment.  If you go to EFTPS and select "deferred social security tax" as the type of payment, the next screen asks for "month" AND "year" for the tax period.  The year is 2020 but what is the month?  If you enter December (thinking a self employed person filing form 1040 has a tax period ending Dec 31) the program returns an error.  If you leave the month blank, the program also returns an error.  You could make an assumption and try some other month but I personally am leary about making asumptions about the correct procedure when it comes to dealing with the IRS. Particularly when the IRS explicitly says the payments "should be a separate payment from other tax payments to ensure they are applied correctly."  Then there is the IRS "direct pay" web portal which offers a dozen or so payment options, none of which are designated as "deferred self employment tax."  So it seems like the only safe option is to mail a paper check where you can print the words on your check "repayment of 2020 deferred self employment tax".

[rjs]

The link above is the only information available from the IRS.

Try entering 2021 as the year in EFTPS. Even though the tax is deferred from 2020, the tax is due in 2021.

[VolvoGirl]

From DoninGA.....

How individuals can repay the deferred taxes

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.

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...

[mwarney]

Not a good idea rjs.  Entering 2021 would probably apply the payment to the wrong year.  Besides...  EFTPS still requires you to enter a month.

[tarao2121]

Has anyone found out more information on this?   I checked my social security.gov account and it does not show that I owe any money, and there is nothing there about how to repay it.  They are not making this easy.   I have found some instructions online, but there is not a way to indicate how the money I pay is to be allocated.  

[VolvoGirl]

Direct from the IRS 

How to pay the deferred self employment tax

How self-employed individuals and household employers repay deferred Social Security tax | Internal ...

The IRS website will not reflect the SS taxes owe separately to the SS administration even though they collect these taxes on their behalf.  

[mwarney]

I got a letter fom the IRS showing the installment amounts due on the deferred SS tax.  

[Critter-3]

The self employment tax deferral was an optional benefit.  It is also a deferral rather than forgiveness, so those amounts will eventually need to be repaid. Half of the deferred amount is due on December 31, 2021, and the other half is due on December 31, 2022.

Check if you have a Schedule 3 line 12e which goes to 1040 line 31.

See this video on how to pay

How do I find out how much I owe in deferred taxes? 

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.

[mwarney]

Ya...  this same info and "instructions" is all over the web as well as the IRS site.  But there are still no "detailed" instructions on how exactly to pay.  "Visiting EFTPS for details" produces no details.  I even called the EFTPS help line and they too were baffled by the lack of information.

[Critter-3]

How self-employed individuals and household employers repay deferred Social Security tax

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