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.
As Lifesum's Workplace Well-being Director, Wesleigh is dedicated to expanding partnerships and scaling Lifesum's corporate wellbeing solution, Lifesum for Work.
Wesleigh brings extensive experience from the health and wellbeing industry. She has contributed to Amazon Alexa's Health and Wellness team, led customer success and channel sales for a workplace mental wellbeing solution, spent many years focused on fitness-industry advertising sales, and scaled Twitter's internal wellbeing program.
Passionate about increasing access to wellbeing practices for underserved younger generations, she serves as Board Chair for the Los Angeles chapter of Girls on the Run, a US-based nonprofit organization.
Mykhailo Iakovenko is the CEO and co-founder of Canonical Labs. He has extensive experience leading fraud prevention and mitigation strategies at leading financial technology companies. With a deep understanding of the evolving landscape of financial fraud, Mykhailo is dedicated to developing innovative solutions to protect the financial ecosystem.
Charlie Sidoti, Executive Director, InnSure
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.
