Explore the Social Security Tax Deferral and Employee Retention Tax Credit included as part of the CARES Act
Legal experts explain how the tax deferral and the retention credit will work
The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes a number of measures to help employers stay in business and to reduce the increasing number of unemployed workers in the country.
Seth Perretta and Malcolm Slee, partners with Groom Law Group, recently discussed the CARES Act during a G&A Partners webinar titled “The Cares Act and What it Means for Your Business.”
Perretta shared that in addition to loans, the $2.2 trillion relief package makes it possible for employers of all sizes to defer payment of their share of Social Security taxes, which would have been due for deposit anytime from March 20 to December 31, 2020, until December 31, 2021. At that time, half of what employers owe from the aforementioned period will be due to the IRS. The other half will not be due until December 31, 2022.
The CARES Act also authorizes the IRS to allow eligible employers to receive immediate access to a refundable tax credit known as the Employee Retention Credit. Perretta helps employers understand how the tax credit works in the following segment.