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.
John Toepfer is CEO of investment management industry software provider Synthesis.
Mona Malone is chief human resources officer and head of people and culture for BMO Financial Group. She is accountable for the people and culture agenda at BMO, which includes human resources, corporate communications, community giving, the office of the Chief Executive Officer, BMO Quebec and the bank’s corporate university, BMO IFL.
Malone has held roles in human resources and in the business for over 20 years at BMO. She was a retail banking sales leader at BMO in the GTA and VP product and marketing officer at ePost (a joint venture between Canada post and BMO). In addition, she has held a range of senior HR roles such as CHRO of Canada’s Personal and Commercial Banking group and chief learning and talent officer.
Malone lives in Toronto with her husband and three children. She is a recipient of the Queen’s Diamond Jubilee Medal in recognition of her community service with youth development organizations.
Malone holds an Honours Business Administration degree from Ivey Business School at University of Western Ontario. She is an advisory council member for the Ian O. Ihnatowycz Institute for Leadership at the Ivey Business School, and a member of the Branksome Hall board of governors and the Long Run Initiative board of governors.
Caroline Seymour is vice president of product marketing at Zerto.
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.
