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CARES Act Deferral of Payroll Taxes

Deferral of employer payroll taxes:

The CARES Act generally provides for a deferral mechanism for the employer portion of any Social Security taxes for the period beginning on March 27, 2020 and ending before January 1, 2021 (the “Payroll Tax Deferral Period”). Under the CARES Act, (i) 50% of the employer portion of any Social Security taxes for the Payroll Tax Deferral Period are generally deferred until December 31, 2021 and (ii) the remaining amount of the employer portion of any Social Security taxes are generally deferred until December 21, 2022.

The CARES Act states that the deferral of the employer portion of Social Security taxes generally does not apply if the employer had any loan authorized by the Small Business Act forgiven under the CARES Act.

Deferral of self-employment taxes:

The CARES Act generally provides for a deferral mechanism for the employer portion of any self-employment taxes attributable to Social Security for the period beginning on March 27, 2020 and ending before January 1, 2021 (the “Self-Employment Tax Deferral Period”). Under the CARES Act, (i) 50% of the employer portion of any self-employment taxes attributable to Social Security for the Self-Employment Tax Deferral Period are generally deferred until December 31, 2021 and (ii) the remaining amount of the employer portion of any self-employment taxes attributable to Social Security are generally deferred until December 21, 2022.