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 an experienced leader in the life and health insurance industries, I have dedicated my career to positively impacting people's lives. With over 20 years of experience, I have gained extensive knowledge in product development, pricing and distribution strategies, project management, process improvement, underwriting, claims, policy administration, and operations management.
My expertise extends beyond traditional insurance practices and encompasses the latest advancements in InsurTech. As an industry analyst, I have evaluated and implemented cutting-edge technology to improve customer experiences and drive operational efficiency. I am passionate about advancing the industry through digital transformation, ecosystem development, and strategic planning.At the heart of my work is a commitment to providing excellent customer experiences. By leveraging technology, talent, and best practices, I believe we can create a more accessible and equitable insurance industry.
When I'm not working, you can find me surfing on the Florida coast or exploring the great outdoors. I'm passionate about animals, supporting our veterans, and believe in appreciating the small things in life. Whether it's through reading my favorite authors or learning new things, I'm always looking to grow and improve.
Phil Mason is the chief operating officer, institutional banking and director, healthcare services at UMB Bank.
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.
