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.
Yaroslav Kuflinski is an IT consultant, and observer of artificial intelligence and machine learning best practices, at Iflexion.
Captain Andrew Kinsey spent 23 years in the U.S. Merchant Marine and U.S. Naval Reserve, sailing in all licensed ranks, including Master. His sailing experience was primarily with Maersk Lines, sailing as Master of three different Container ships.
He also served as Master aboard two Military Sealift Command (MSC), Large Medium Speed RORO (LMSR) ships, the USNS “Sisler” and USNS “Red Cloud.” He served in Operations Desert Shield & Desert Storm, Restore Hope, Enduring Freedom and Iraqi Freedom, and received numerous decorations and awards.
After coming ashore in 2006, Andrew worked as an independent Marine Surveyor in the Tri-state area and joined the ACE/US Commercial Marine - Marine Advisory Service, in 2009. At ACE he was responsible for providing a wide range of Risk Control services to support its commercial book of marine business, including Cargo, Project Cargo, Hull & Machinery, Terminal Operators, and related Inland Marine LOB’s.
Andrew is a graduate of the United States Merchant Marine Academy at Kings Point, NY (1984) and holds a Bachelor’s degree in Marine Transportation/ Nautical Science. He also holds an Unlimited U.S. Coast Guard Masters License, for vessels of any gross tonnage upon oceans.
Mariel Beasley is co-founder of the Common Cents Lab at Duke 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.
