FICA Payments on Paycheck Protection Program Loans Can Be Deferred

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Small businesses who received a Paycheck Protection Program (PPP) loan can defer the employer's share of payment of the FICA (Federal Insurance Contributions Act) until their PPP lender issues a decision on whether or not to forgive the loan. This deferment, which begins with the March 27, 2020 FICA payment date, can be made without incurring any penalties for failure to deposit the required funds.

However, once the employer receives a decision from its lender that its PPP loan is forgiven, the employer is no longer eligible to defer deposit and payment of the employer's share of Social Security tax due after that date. The amount of the deposit and payment of the employer's share of Social Security tax that was deferred through the date that the PPP loan is forgiven continues to be deferred.

This requirement surrounding a PPP loan can be complex. For assistance please contact Gray, Gray & Gray's Tax Department at (781) 407-0300.

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