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.
Liz Herbert focuses on the technology services industry, helping clients navigate this fast-changing market and maximize the business value of their technology investments. As a principal analyst, Liz helps clients understand the key dynamics in the enterprise application services
market and make smart technology sourcing decisions. Specific topics of focus include SaaS, SAP and Oracle Services, and services for cloud and mobile. Liz has extensive experience helping technology buyers select services partners, manage provider relationships, and negotiate favorable contracts. She also advises technology and technology services vendors on market dynamics, buyer demands, competitive landscape, and go-to-market.
Liz has been a featured speaker at leading industry events such as SaaScon, Nasscom, Society of Information Managers, and World BPO Forum. She has been quoted in leading publications including The Wall Street Journal, Fortune, The New York Times, and CIO Magazine. Liz has been featured as a technology expert on TV news segments, including Bloomberg TV and Boston-based NECN. She was named IIAR Services analyst of the year in 2010.
Previous Work ExperiencePrior to joining Forrester in 2002, Liz worked at the US Department of Transportation's Volpe Center, programming a computer simulator to test equipment for GPS-based ship navigation. Liz also worked as a researcher at the MIT Media Lab, programming "smart" objects that sense and "think" and researching electronic ballot user experience as part of the Caltech/MIT Voting Technology Project. Prior to working at the MIT Media Lab, Liz worked in the COMDEX division of Ziff Davis.
EducationLiz holds a B.S. in computer science and electrical engineering from the Massachusetts Institute of Technology.
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.
