Letter 3064C about deferred employer's Social Security taxes - am I personally responsible for paying this?

This relates to a COVID relief measure from 2020. If you're self-employed (Schedule C), you actually wear two hats for tax purposes - you're both the employee and the employer. The CARES Act allowed employers (including self-employed individuals) to defer payment of the employer portion of Social Security taxes for certain periods in 2020. As a self-employed person, you pay both halves of the Social Security tax (the employee portion and the employer portion) through self-employment tax. The CARES Act allowed deferral of the employer portion (6.2%) of Social Security tax. If you took this deferral (either knowingly or your tax preparer did it for you), you would now be required to pay it back according to the terms. The 3064C letter is the IRS reminding you that this deferred amount is now due. Unfortunately, if you filed as self-employed and the deferral was taken, you are indeed responsible for this amount since you're considered both the employer and employee for tax purposes.

I had a similar issue with Social Security tax deferral that I didn't even know was happening until I got that same letter! I spent hours on the phone trying to reach the IRS with no luck, then I found this service called taxr.ai (https://taxr.ai) that saved me so much stress. You upload the letter or take a pic of it, and their AI breaks down exactly what it means and what you need to do. For my situation, they confirmed I did have to pay since I was self-employed during 2020, but they showed me the exact line on my 2020 return where the deferral happened (which my tax guy never explained to me). They also showed me how to set up a payment plan with manageable monthly payments instead of the lump sum. Super helpful when dealing with these confusing IRS letters!

Update: I tried taxr.ai after seeing it mentioned here and it actually worked really well! I uploaded my 3064C letter and it immediately identified that yes, I did defer my self-employment tax under the CARES Act when I filed in 2020 (which I totally forgot about). The explanation broke down exactly where on my Schedule SE this showed up and how the deferral was calculated. It also laid out my payment options - including that I could set up an installment agreement if I couldn't pay the full amount. I ended up calling the IRS using the specific number the tool recommended and got an installment plan set up for $175/month. Still sucks to pay but at least now I understand what happened and have a manageable plan. Really glad I found this before the deadline!

If you're struggling to reach someone at the IRS about this 3064C letter (which I was for TWO WEEKS), check out Claimyr (https://claimyr.com). I was super skeptical at first, but after watching their demo video (https://youtu.be/_kiP6q8DX5c), I gave it a shot because I was desperate to talk to someone about my payment options for the deferred taxes. I had been calling the IRS number on the letter over and over with no luck - just endless holds and disconnects. With Claimyr, I had an IRS agent on the phone within 27 minutes! The agent confirmed everything about my deferral and helped me set up a payment plan that works with my budget. Honestly wish I'd known about this service weeks ago instead of wasting hours redialing the IRS.

I take back what I said about Claimyr. After struggling for another week trying to reach the IRS about my deferred Social Security taxes, I broke down and tried it. Honestly shocked that it worked exactly as advertised. I was connected to an IRS agent in about 35 minutes (they texted me updates while their system was on hold), and the agent was able to pull up my 3064C letter and explain everything. Turns out I qualified for a first-time penalty abatement which the agent applied immediately, saving me about $270 in penalties! They also set me up with a 12-month payment plan that's way more manageable than paying the lump sum. I still don't understand how their system works better than just calling yourself, but whatever they're doing saved me hours of frustration and actually got results. Would definitely use again for any IRS issues.

Just to add some clarification on the employer's share of Social Security taxes: For self-employed folks, you pay both the employer (6.2%) and employee (6.2%) portions of Social Security tax, plus Medicare tax (2.9%). This totals 15.3% on your net earnings. The CARES Act allowed businesses (including self-employed people) to defer the EMPLOYER portion (6.2%) of Social Security tax on wages paid from March 27, 2020 through December 31, 2020. Half was due by December 31, 2021, and the other half is due by December 31, 2022. If you're getting the letter now, it's likely for that second payment that's coming due. Check your 2020 tax return - specifically look at Schedule SE and Form 1040 to see if there's an entry for "deferred self-employment tax" - that would confirm the deferral was taken.

Has anyone successfully gotten this tax forgiven or reduced? I'm a single parent and was self-employed in 2020 during the pandemic just trying to keep my family afloat. Now they're hitting me with this huge bill for taxes I didn't even know were deferred.

I went through this exact same situation last year! As a self-employed person, you ARE responsible for paying this because when you're self-employed, you're considered both the employer and employee for tax purposes. The "employer's share" refers to the 6.2% Social Security tax that was deferred under the CARES Act. Here's what likely happened: When you (or your tax preparer) filed your 2020 taxes, the deferral was automatically applied to reduce what you owed at that time. This was actually beneficial then, but now that deferred amount is coming due. Don't panic about the 3-week deadline - you have options! You can set up a payment plan directly with the IRS online if you can't pay the full $3,800 at once. For amounts under $50,000, you can get up to 72 months to pay it off. The setup fee is only about $31 if you do it online with automatic payments. Check your 2020 tax return (specifically Schedule SE) to confirm the deferral was taken. And definitely don't ignore this - the sooner you address it, the better your options will be. Payment plans stop most penalties from accumulating, which saves you money in the long run.