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.
Sandy Steier is chief executive officer at 1010data.
Christopher Condo serves Application Development & Delivery (AD&D) Professionals. He is part of Forrester's AD&D coverage of DevOps tool chains, focusing on continuous integration (CI) and continuous delivery (CD) as well as software development strategies for enabling those strategies.
Previous Work Experience
Prior to his current role as an analyst, Chris was the engineering manager for the enterprise web applications team for Altran North America, where he oversaw and led the development of enterprise applications in the medical device and automated warehousing industry. Chris led a team of 10 software engineers, developed proposals, led estimation efforts, led resourcing efforts (including offshore), and also pitched in as an individual contributor. Chris has firsthand experience of developing software using agile practices and helping clients migrate to CI and CD methodologies as well as migrating to the cloud.
Prior to Altran, Chris was a senior development engineer at Microsoft for 13-plus years, working in the SaaS space starting with the Microsoft bCentral suite of online eCommerce tools targeted at small to medium businesses. Chris went on to lead software development efforts for the Office Live product suite, developing CRM and eCommerce platforms for Microsoft's growing online customer base. With Office 365, in addition to feature development, Chris worked on early tool chains that enabled global configuration and secure cloud deployments prior to their mainstream existence on the Azure platform. He also performed research and development on components to limit the impact of DOS attacks.
Before Microsoft, Chris held senior software engineering roles at FASTech, M/A-Com, and Digital Equipment Corp.
Education
Chris graduated from UMass Lowell with a B.S. in computer science. Chris is an active member of UMass Lowell Computer Science Industry Advisory Board.
Schechter is an associate attorney at Butterfield Schechter LLP in San Diego.
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.
