“We are constantly looking for innovative solutions that will deliver more value to our clients, especially during these challenging economic times. We are excited to offer this deferral program as it could result in hundreds of thousands or even millions of dollars in cash flow now for clients with significant contingent spend. Smaller businesses benefit as well: any deferral amount could make a significant financial difference.”
– John Chuang, Aquent/Vitamin T CEO
Vitamin T announced today it would give its clients the opportunity to defer the employer portion of FICA taxes on their Vitamin T talent. Called the Vitamin T CARES Extension Program, it is the first program of its kind in the staffing industry designed to help companies with their cash flow amid the pandemic.
Vitamin T has deferred the employer portion of the FICA taxes it pays on its talent since the CARES Act was passed. With the Vitamin T CARES Extension Program, the company will offer this cash flow benefit as interest-free loans to participating clients. If clients choose to participate in this program, Vitamin T will offer them two payments: the first will be sent immediately, reflecting employer FICA taxes deferred from spring 2020 to mid-September. The second payment, which will be sent to clients in January 2021, will reflect employer FICA taxes deferred by Vitamin T from mid-September until the end of 2020.
The FICA deferral payment for Q4 can apply across a company’s entire contingent workforce through Vitamin T’s Employer of Record services. It is not limited to Vitamin T’s existing marketing and creative talent. Vitamin T CARES Extension Program offers what amounts to an interest-free loan at a critical time when many companies are struggling with COVID-19-related economic fallout and cash flow.
As part of the CARES Act legislation passed by Congress, employers can defer the employer share of FICA taxes (6.2% up to the taxable maximum) from March 27, 2020 through December 31, 2020. Employers do not need to pay these taxes until the end of 2021 and the end of 2022; half is due at the end of each year.
Vitamin T anticipates using the Vitamin T CARES Extension Program as a model to provide its clients similarly proportionate, “pay as you go” benefits in the future, such as paid sick leave and health insurance.
If you are currently working with us and want to participate in our FICA deferral savings reach out to your Vitamin T contact or call us at (617) 535-5000.