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.
Atul Tandon serves as CEO of Opportunity International, a Chicago-based international NGO that designs, delivers and scales innovative financial solutions to help families living in poverty build sustainable livelihoods. The NGO reached over 18 million people last year, supporting individuals and families experiencing extreme poverty in Sub-Saharan Africa, Asia, as well as Central and South America. As a global executive for Citibank, Tandon pioneered personal banking solutions in India and grew Citi's global consumer networks to more than 146 million accounts with a presence in over 100 countries.
Rafael Bernard, CFP, MSFP, is an alumnus of Kansas State's financial therapy program and Bentley University's financial planning program.
He has experience researching financial literacy, designing financial therapy-driven client activities, and leveraging experiential learning to build financial wellness curricula.
Brandon Ellison is the founder and CEO of Quility. He was born in Birmingham, Alabama and earned a Bachelor of Science degree in Accounting from the University of Alabama in 2000. Following graduation, he pursued work as a musician in Crested Butte, Colorado. In 2001, upon moving to Asheville, North Carolina, he acquired his insurance license and established a career as a life insurance agent. In 2002, Mr. Ellison met Casey Watkins while they were working as agents for the same company; the two established a friendship as well as a healthy rivalry that drove them both to grow into two of the top managers in that company.
Through their experience as insurance agents, they recognized an opportunity to elevate the industry's business model by reshaping the relationship between agents and their respectful uplines. Founded in their belief that what benefits individuals will ultimately benefit the whole, they envisioned a model in which the wellbeing, growth and financial success of agents would take the forefront. They launched Symmetry Financial Group in 2009 to translate their vision into reality, and in the 12 years since have transformed Symmetry into the modernization of the new company, Quility, with a revenue hitting over $70 million.
Ellison still enjoys playing the guitar. He also loves long hikes in the beautiful Blue Ridge Mountains with his wife, Meredith. They have three children, Addie Ruth, Levi and Woods, that keep their home and calendars full and abundant.
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.
