Deferred SS Tax - Self-Employed

[TomJ]

I was originally (mistakenly?) under the impression that the any deferred SS tax for the self-employed, taken on the 2020 return, would just be added 50% to 2021 tax liability and 50% to 2022 tax liability, just like any other tax liability for those years. That would have meant underpayment interest if the safe harbor rules weren't met, but no penalties for failure-to-pay. It appears from the recent IRS FAQs on this topic that failure-to-pay penalties will apply if 2021's 50% repayment isn't made (and separately identified) via an estimated tax payment by 12/31/2021. Is that the way the rest of you understand it as well? We need to make sure our self-employed's who deferred the tax in 2020 make an estimated tax payment, separately identifying it as a repayment of deferred SS tax, by 12/31/21?

As an aside, if my newfound understanding is correct, what a PITA that is! Couldn't Congress have gone one step further and made this process a whole lot easier, by allowing taxpayers to just pay with their 2021 returns?!?

[TAXNJ]

Have you looked at the IRS link?

https://www.irs.gov/newsroom/how-self-employed-individuals-and-household-employers-repay-deferred-social-security-tax

[TomJ]

I had not seen that one... only this: https://www.irs.gov/newsroom/deferra...cember-31-2020. Those FAQs mix self-employed vs. employer deferred FICA deposits and it was hard to tell where a penalty may apply since they refer to it as a "failure to deposit" penalty. Your link makes it pretty clear that penalties will apply beyond 12/31. Thank you for verifying my newfound understanding. I'm going to have some annoyed clients.