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.
Wendy Herndon is second vice president of Product Launch and Adoption at Aflac. With more than 20 years of experience in this field, she is responsible for providing the overall strategy for all product-related launch, promotional and educational activities.
As benefits analytics consultant, Mr. Austin is responsible for developing leading-edge analytic methodologies embedded within the Artemis reporting system. Mr. Austin also performs analyses and supports clients in the implementation of their integrated health, attendance and disability management programs.
Mr. Austin has over thirty years experience in the healthcare industry with the majority of the time focusing on Health and Productivity Management. Mr. Austin has previously worked at other data warehouse organizations (Nuna, OptumHealth and IBM Watson Health) providing similar client insights and product support. He also has experience working in benefits administration for two large employers in California: Pacific Gas & Electric (Senior Manager – Workforce Health) and Pacific Bell (Director – Health and Productivity).
Mr. Austin holds an MBA and Sloan Certificate in Hospital and Health Care Administration both from Cornell University and a BA in Psychology from the University of California at Berkeley.
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.
