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.
Scott Taylor is CEO and & founder of Perx Health, a leading engagement platform for chronic conditions.
Peter Keating is an investigative financial journalist who has been reporting complex financial stories for more than 25 years. His work has been published recently by GQ, Inc., National Geographic, New York and Politico.
Keating was a founding member of ESPN’s Investigative Unit, where his longform projects included pioneering work that exposed for the first time how the NFL dealt with brain injuries. At ESPN, Keating was a frequent commentator on Outside the Lines and public speaker, making six appearances at the Sloan Sports Analytics Conference, and was part of teams that won three National Magazine Awards. His work has also earned 10 Journalism Awards from the New York Press Club, as well as Investigative Reporters and Editors, Deadline Club and National Headliner Awards.
Keating has written four national columns: “Numbers” and “The Biz” for ESPN the Magazine (1999-2019), “The New Retirement” for Smart Money (2006-2010) and “The Advocate” for Money (1999-2000). He was the senior writer for politics at George during the 2000 presidential campaign.
Keating lives in Montclair, New Jersey, with his wife Karen, their daughters Ellie and Samantha, and their dog, Otis.
Betsy Branagan leads the reserving and claim analytics function at Xceedance. She has over 30 years of experience in traditional actuarial roles of reserving and pricing as well as expertise in leadership, strategy, data management and organizational change.
Prior to joining Xceedance, Betsy held the position as the Appointed Actuary for Plymouth Rock Assurance Company. She managed the loss reserving and pricing functions, led the integration of data from acquired entities, and implemented new reserving tools and processes. Betsy has held leadership roles at Hanover Insurance Group, Arbella Mutual Insurance Company, AIPSO, and on a number of industry committees.
Betsy is a Fellow of the Casualty Actuarial Society and a Member of the American Academy of Actuaries. She holds a master’s degree in business administration from Indiana State University’s Kelley School of Business and a bachelor’s degree in Mathematics from Clark University.
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.
