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.
Robert Lewis is senior vice president of innovation and development at Verisk, where he uses data, analytics, and technology to drive efficiencies and automation in the claims handling process.
Rob was president of Verisk's Casualty Solutions from 2011 until 2022. He joined Verisk when it acquired Crowe Paradis Services Corporation (CPSC), a company he co-founded in 2006. Rob was vice president of sales and marketing from its founding until the acquisition, when he was promoted to president.
Prior to joining Verisk, Rob practiced insurance defense litigation in New Jersey and North Carolina and was a partner in the New Jersey law firm of Capehart & Scatchard. In 2004, he was selected by the New Jersey Law Journal as one of the "Top 40 lawyers under the age of 40."
Ilya Filipov has over 15 years of experience leading growth strategies across life, property, and casualty insurance. As Total Expert's General Manager of Insurance, he leads vertical growth and works directly with customers and prospects to address industry pain points and promote enhanced customer experiences across the entire financial enterprise.
Josephine Stone is Director, Digital Payouts at Fiserv, a leading global provider of payments and financial services technology solutions.
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.
