The Internal Revenue Service released information on how employees now have until the end of the year to repay any payroll taxes they deferred from last year.
Former President Trump issued a presidential memorandum last August allowing Social Security taxes to be deferred for the rest of 2020, but under the order they had to be repaid by April 30, 2021. The coronavirus relief package that Congress passed last month extended the repayment period until the end of this year.
Relatively few companies actually implemented the payroll deferral for their employees because there was no guarantee that the deferred payroll taxes would ultimately be forgiven by Congress. However, federal employees and military service members were still required to accept the payroll tax deferral, meaning those taxpayers will be facing smaller paychecks later this year.
Jennifer Adams is a senior forecast analyst, focusing on the business technology and eCommerce space. She leverages Forrester's proprietary survey data, along with extensive industry research, to model and develop forward-looking insights into the technology markets. Recent topics of interest include commerce software, cloud security, and mobile devices and developer tools.
Previous Work Experience
Jennifer has over 20 years' experience working with technology, media, and energy companies in forecasting, strategic planning, financial, and marketing roles. Most recently, she provided forecasting, valuation, and strategic planning services to clients in the technology and media space on an advisory basis. Previously, Jennifer worked in the Institutional Research group at Cowen and Company, publishing research reports on the telecom services sector including RBOCs, mobile operators, long-haul carriers, colocation/hosting providers, and satellite operators .Additional experience includes financial and planning positions at global satellite operator Intelsat; economic consulting firm Putnam, Hayes & Bartlett; British Petroleum; and railroad company CSX.
Education
Jennifer earned an MBA from the University of Chicago and an undergraduate degree in economics from Cornell University. She is a chartered financial analyst (CFA).
Lisa McCann is special counsel in the international corporate tax team of Withers. She focuses on advising clients on US and foreign tax planning and compliance.
Cody J. Fierro is an associate in the Corporate Practice Group in Sheppard Mullin’s Century City office and is a member of the firm's Healthcare Team.
In Notice 2021-11, the IRS on Tuesday explained how employers who deferred payroll taxes on behalf of their employees can withhold and pay the deferred taxes throughout 2021 instead of just within the first four months of the year.
The deferral applied to employees who were paid less than $4,000 every two weeks, or an equivalent amount for other pay periods, with each pay period considered separately. The taxes, which are technically called Old Age, Survivors and Disability Insurance, or OASDI, are calculated at 6.2 percent of employees’ wages.
Notice 2021-11 makes changes to last year’s Notice 2020-65 to reflect the extended payment period. Payments made by Jan. 3, 2022, will be considered to be timely because Dec. 31, 2021, is a legal holiday. However, any penalties, interest and additions to tax will now start to apply on Jan. 1, 2022, for any unpaid balances
The IRS cautioned that employees could see their deferred taxes being collected immediately, so employees should check with their organization’s payroll point of contact on what their collection schedule will be.
