| Our latest report looked at a lesser-known pandemic relief provision that allowed employers and self-employed individuals to defer Social Security tax payments during the pandemic. More than 1 million employers opted to use the deferment, and most paid it as required. However, approximately $2 billion in unpaid deferrals remain (as of July 2024). Why did we do this audit? The Social Security tax is a federal payroll tax imposed on both employees and their employers to fund Social Security. Employers must withhold a portion of the tax from their employees' wages and remit this to the IRS on their behalf. The CARES Act let employers and self-employed individuals defer Social Security tax payments during the pandemic. This temporary deferment of Social Security taxes were expected to be paid by December 2021 or December 2022. We evaluated the IRS's efforts to ensure that taxpayers pay their deferred Social Security tax as required. What did we find? As of July 2024, nearly 1.1 million employers deferred approximately $133 billion in Social Security taxes for Tax Year 2020. An estimated $131 billion (98 percent) was paid. However, 167,373 employers had approximately $2 billion (2 percent) in unpaid deferrals. According to the IRS, as of May 2025, there were approximately 10,000 employers remaining who had not paid their deferral, and the IRS had yet to manually adjust their account which would subject the unpaid amounts to standard collection processes. Employers that did not timely pay their deferred Social Security taxes by the December 2021 and December 2022 due dates, or by the time the IRS manually adjusts their account, are subject to the IRS's standard collection processes. As of July 2024, the IRS assessed an estimated $591 million in penalties and interest on 403,711 tax accounts for employers who failed to timely pay their deferred Social Security taxes. For more information:
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