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.
Jane Diplock AO is chair of the Supervisory Board of the Global Reporting Initiative. She was appointed chair of the GRI Supervisory Board in January 2026. She is a highly experienced corporate governance professional who has served on numerous boards and committees for listed, private and nonprofit entities, with a focus on sustainability standards, regulation, impact reporting and digitization. She is a former Chair of both the IOSCO Executive Committee and the Securities Commission of New Zealand. Her current governance roles include positions with the World Benchmarking Alliance, A4S, Abu Dhabi Global Market Appeals Panel, Wellington Zoo Te Nukuao, and Persefoni AI. Earlier in her career, she led government departments in New South Wales, Australia, and held executive leadership positions in Westpac Banking Corporation. Jane holds degrees in arts and law and a Diploma of Education from Sydney University, and a Diploma of International Law, International Economics and International Relations from the Australian National University, while she was a Chevening Fellow at the London School of Economics. In 2004 she was awarded the Order of Australia for her contribution to business and commerce.
Burcu Bree Manay is founder and managing partner of Manay CPA. She serves on the board of the Georgia Chamber of Commerce and is a member of the Forbes Business Council. She is a CPA and Certified Tax Coach with about 25 years of professional accounting, financial planning, tax and business consultancy experience in various U.S. and international sectors.
Gurpreet Chaggar is an associate product marketing manager at Prophix. She joined the company in 2019 as an implementation consultant, where she developed a deep understanding of Prophix's solutions and the impact Prophix has on helping clients optimize business outcomes.
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.
