Deferring Payment of Employer's Share of Social Security if using Transmittal Vendors

Deferring Payment of Employer's Share of Social Security if using Transmittal Vendors

Under the CARES Act, employers have the ability to defer payment of the employer's share of Social Security taxes to the IRS to assist with cash flow.  The deferral applies to payments of the employer's share of Social Security tax from the period beginning on March 27, 2020 and ending December 31, 2020.  The Form 941 will be revised for the second quarter of 2020 to accommodate these deferrals.  Click here for more information.

If you choose to defer payment of the employer's portion of Social Security to the IRS and are using Transmittal Vendors in Payroll, follow these steps so that the amount calculated for payment to the IRS excludes the employer's portion of Social Security tax.
  1. Open Payroll | Transmittal | Modify Existing Transmittals.
  2. Navigate to the EFTPS vendor that is used to pay the IRS.
  3. Click on the Pay Codes tab.
  4. Click Select to the right of the Employer pay codes.                                                                                                                                                                   
  5. Double-click on 74-00 Social Security Tax under Selected pay codes.  This will move the pay code to the Available pay codes leaving only 75-00 MEDICARE.   
  6. Click OK.  
This amount will stay in your liability account until payment is rendered to the IRS.  If you would like to setup another Transmittal Vendor to track this amount due, follow these steps.
  1. Open Payroll | Transmittal | Modify Existing Transmittals.
  2. Navigate to the EFTPS vendor that is used to pay the IRS.
  3. Click on the Copy button on the toolbar.                                                                                                                                                                                                                                   
  4. Rename the Transmittal Vendor (e.g. IRS EFTPS PAYMENT - DEFERRED) in the Name field. 
  5. Click on the Pay Codes tab.
  6. Click Select to the right of the Employee pay codes.   
  7. Click on <- Deselect All so there are no pay codes under Selected pay codes.
  8. Click OK.
  9. Click Select to the right of the Employer pay codes.   
  10. Click on <- Deselect All so there are no pay codes under Selected pay codes.
  11. Find pay code 74-00 Social Security Tax under Available pay codes and double-click on it to move it to Selected pay codes.
  12. Click OK.                                     
  13. Click Close.
  14. Open Payroll | Transmittals | Transmittal Checks.
  15. Double-click on Column under Selection Criteria.                                                                                                                                                                                                      
  16. Find Transmittal Vendor.Name under Available Selection Criteria Fields.  Once you find it, double-click on it to move it under Selected Selection Criteria Fields.
  17. Click OK.
  18. Double-click on All next to Transmittal Vendor. Name.                                                                                                                                               
  19. Click on Operators and select {<>} Is not equal.
  20. Click Search.
  21. Find the Transmittal Vendor created in the steps above and double-click on it.
  22. Click OK.                                                                                                                                                                                                         
  23. Click the Save button on the toolbar.
  24. Click OK.
By doing this, we have setup a Transmittal Vendor that will hold the amount due to the IRS and eliminate a check from being generated every pay period until the time you are ready to pay.  Please note that these amounts will appear as unpaid on your Transmittal Register until such time they are paid.  


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