IRS Extends Repayment Period for Deferred Employee Payroll Taxes, Feb. 11, 2021

Beginning September 1, employers were given the option of deferring the employee portion of the payroll tax through December 31, 2020. Employers were entitled to stop withholding the 6.2% employee portion of the Social Security tax for employees who earn less than around $4,000 bi-weekly (pre-tax). Under prior IRS guidance, deferred payroll taxes were required to be repaid during the period beginning January 1, 2021 and ending April 30, 2021. IRS Notice 2021-11 extended this repayment period so that amounts repaid by January 3, 2022 will now be considered timely (because December 31 and January 1 are holidays). Taxes that are not repaid before January 1, 2022 will accrue interest and penalties. Employers are entitled to pass those amounts on to employees who have not repaid their deferral amounts. For more information on the ability of employers to defer employment tax liability in response to the COVID-19 pandemic, see Q .