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.
U.S. Bancorp, Wells Fargo, WSFS and others were already deeply engaged in digital transformations before the coronavirus crisis led them to pivot — quickly.
Hillery Hunter is the Vice President and CTO of IBM Cloud. Her work focuses on cross-disciplinary technology, spanning silicon to system architecture to achieve new solutions to traditional problems. Her team pursues hardware-software co-optimization to take the wait time out of machine and deep learning problems.
She previously severed as Director of Accelerated Cognitive Infrastructure in IBM Research, leading a team doing cross-stack (hardware through software) optimization of AI workloads, producing productivity breakthroughs of 40x and greater which were transferred into IBM product offerings. In 2010, she was selected by the National Academy of Engineering for its Frontiers in Engineering Symposium, a recognition as one of the top young engineers in America.
Hunter is a BS, MS, and PhD graduate of the University of Illinois at Urbana-Champaign, specializing in Electrical Engineering. She is a member of the IBM Academy of Technology and was appointed as an IBM Fellow in 2017.
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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.
