CARES Act Payroll Tax Deferment and Credit

CARES Act Payroll Tax Deferment and Credit

The deadline for businesses to pay payroll taxes for 2020 has been delayed by the CARES Act. Half of the employer payroll taxes will be due on December 31, 2021 and the remaining half will be due on December 31, 2022. Businesses will also be able to apply for a 50% refundable credit towards their 2020 payroll tax liability on up to $10,000 in wages per employee. This will only be applicable to businesses who suffer from having suspended operations or experience a 50% reduction in gross receipts when compared the the same quarter last year. If the business has more than 100 employees, it will only be able to apply the credit for retained employees who are not working due to the coronavirus. 

More guidance from the IRS is expected soon.