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.
Missy Plohr-Memming is senior vice president of MetLife’s Group Benefits National Accounts Sales organization, which provides employee benefits solutions to U.S. based employers with 5,000 or more employees. In this role, Plohr-Memming oversees sales strategy and key growth initiatives to drive top-and bottom-line financial results.
The 15 bankers will be honored for their exemplary accomplishments at The Most Powerful Women in Banking: Next Awards dinner on October 25th, part of the weeklong celebration for the 20th anniversary of The Most Powerful Women in Banking
William Dunkelberg is professor emeritus of economics in the College of Liberal Arts, Temple University, where he served as dean of the School of Business and Management from 1987 through 1994 and as Director of the Center for the Advancement and Study of Entrepreneurship. He currently serves as chief economist for the National Federation of Independent Business. His prior appointments were at the Krannert Graduate School of Management, Purdue University, the Graduate School of Business, Stanford University and the Survey Research Center at the University of Michigan. He has BA, MA and Ph.D. degrees in economics from the University of Michigan. Dunkelberg is a nationally known authority on small business, entrepreneurship, consumer credit and government policy. He has appeared on CNBC, Bloomberg, Fox, CNN, MSNBC, the ABC, CBS and NBC Evening News programs, "Good Morning America" and numerous local news and business TV and radio shows. He is frequently quoted in major news publications including The Wall Street Journal, Forbes, Bloomberg Business Week, The New York Times, U.S. News & World Report and USA Today, and serves on the economic forecasting panels for USA Today and Bloomberg and as an economic advisor to ABC News. He is the author or co-author of numerous books and articles.
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.
