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.
Don Okolie is the global head of underwriting at Genpact, where he leads the growth, development, and market penetration of the practice globally. He has over 20 years of experience in claims adjudication, pricing and analytics, finance and accounting, operations, reinsurance, underwriting operations, project management, change, and transformation. Genpact is the Agentic Operations company helping over 300 insurers across the globe with AI-powered transformation.
Neycho Tepavicharov is co-founder of Flashcloud, a web hosting company. He has spent nearly two decades in the hosting industry and co-founded and sold a hosting company before starting Flashcloud.
David Seider is the Chief Commercial Officer of TheZebra.com, the company simplifying the insurance shopping experience. In this role, David oversees a broad scope related to revenue-generating activities, partner relationships, agency initiatives, and corporate development efforts. He is an excellent source on discussing auto and home insurance industry trends, the impact of macroeconomic factors on insurance rates, M&A activity and more.
Prior to joining TheZebra.com, David was a Partner at Weatherford Capital, a growth equity firm with over $1 billion in committed capital. He led the firm's investment analysis, transaction execution, and portfolio management activities. During his time at Weatherford Capital, David served on the board of directors of SOMA Global, Branch, HDVI, Stellar, and TheZebra.com. In past roles, he has also led merger and acquisition execution and capital raising efforts.
David earned his B.S. in business administration from the University of Florida and is a member of the Florida Blue Key leadership honorary. He earned his M.B.A. degree from Duke's Fuqua School of Business and graduated with highest honors as a Fuqua Scholar.
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.
