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.
Kyle Tierney leads solutions engineering at RecVue, guiding enterprise organizations through the architectural design and technical validation of modern revenue platforms. He brings over 15 years of experience delivering complex billing, revenue recognition and partner compensation solutions across high-scale environments. Previously at BillingPlatform and Zuora, he worked closely with global enterprises to design monetization systems supporting subscription, consumption and multiparty revenue models. He earned his degree in Business Administration and Management from Bryant University.
Mary Callahan Erdoes is Chief Executive Officer of JPMorganChase's Asset & Wealth Management line of business – one of the largest and most respected investment managers and private banks in the world, with more than $7 trillion in client assets and a 200-year-old legacy as a trusted fiduciary to corporations, governments, institutions and individuals. Since joining the firm 30 years ago, Erdoes has held senior roles across Asset & Wealth Management before becoming its CEO in 2009 and joining the JPMorganChase Operating Committee, the firm's most senior management team.
Erdoes earned her undergraduate degree in Mathematics at Georgetown University. She serves on the Global Advisory Council of Harvard University, where she earned her MBA, the board of Harvard Management Company, and the U.S.-China Business Council.
Erdoes resides in New York City and has three daughters.
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.
