Section. 2302(a)(1) of the CARES Act allows taxpayers to defer paying the employer portion of the social security taxes on payroll beginning on 3/27/20 (date of enactment of the CARES Act) and ending on 12/31/20, inclusive.
Half of the deferred amount will be due at the end of 2021 and the other half will be due at the end of 2022. Basically this provision amounts to an interest-free loan with no strings attached — unless the business fails to pay when that loan matures.
Applicable employment taxes do not include the employer portion of Medicare taxes imposed under IRC Section 3111(b).
Similar rules (both deferral and risks) apply to half of the SECA taxes paid by self-employed individuals related to social security tax (but not Medicare tax). CARES Act Section 2302(b)(1).
This write-up provides more expansive analysis of the optional provision and it’s traps:
https://www.lanepowell.com/Our-Insights/200505/Who-Really-CARES-How-the-Delayed-Payment-of-Employer-Payroll-Taxes-Will-Help-Business-Until-it-Hurts
