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.
Hardy Manges is Head of Municipal Dealer Sales at MarketAxess, responsible for new business development and strategy, training, and relationship management with dealers in the institutional municipal market.� Mr. Manges joined MarketAxess in February 2016 from Cantor Fitzgerald & Co. where he was Co-Head of the Municipal Debt Capital Markets Group.� Prior to that he was Head of Municipal Sales and Trading at Mitsubishi Securities.� He has extensive experience in secondary municipal market liquidity and trading and has held a variety of senior positions in the municipal divisions of Alex. Brown & Sons, BankersTrust and Deutsche Bank.� Mr. Manges received an M.B.A. in Finance from Loyola University Maryland and a B.A. in Economics and Spanish from Denison University. �
John Gallagher is Head of Municipal Bonds and U.S. High Grade Product Management at MarketAxess, responsible for managing Municipal Bond and U.S. High Grade product development.�Mr. Gallagher joined MarketAxess in 2002 following the acquisition of TradingEdge, Inc. which he had joined in 2000 with the responsibility for high yield and distressed debt sales. At MarketAxess, Mr. Gallagher was initially responsible for electronic trading product development for U.S. high-grade, high yield, U.S. Agency and emerging market debt markets. Mr. Gallagher also piloted the development and sales for MarketAxess’ first inter-dealer trading platform, DealerAxess�, as well as the launch of the firm’s credit derivatives trading platform in 2005. Mr. Gallagher began his career as a fixed income and mortgage-backed securities (MBS) trader and has an established track record in MBS sales and trading with senior roles at various broker-dealers such as Merrill Lynch and Nomura. Mr. Gallagher received a B.A. in Economics with a Minor in German Language from Fairfield 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.
