The IRS on Jan. 19 in Notice 2021-11 has announced additional relief regarding employment tax deadlines applicable to employers affected by the pandemic.
Notice 2021-11 makes changes to Notice 2020-65, which the IRS issued Aug. 28 to provide guidance implementing President Trump’s Aug. 8 Presidential Memorandum directing the Secretary of the Treasury to defer the withholding, deposit and payment of certain payroll tax obligations under Internal Revenue Code Section 7508A.
Notice 2020-65 gives employers the option to defer certain employees’ Social Security taxes from Sept. 1, 2020, to Dec. 31, 2020. This applied to employees paid less than $4,000 every two weeks, or an equivalent amount for other pay periods, with each pay period considered separately. Any taxes deferred under Notice 2020-65 are withheld and paid ratably from employee wages between Jan. 1, 2021, until April 30, 2021.
However, the Consolidated Appropriations Act, 2021 extended from April 30, 2021, to Dec. 31, 2021 the period that the deferred taxes are withheld and paid ratably. Therefore, the period is now for the entire year—from Jan. 1, 2021, through Dec. 31, 2021.
Notice 2021-11 makes changes to Notice 2020-65 to reflect this extended period. Payments made by Jan. 3, 2022, will be considered timely because Dec. 31, 2021, will be a legal holiday. Associated interest, penalties, and additions to tax for late payment with respect to any unpaid Applicable Taxes will begin to accrue on Jan. 1, 2022, rather than on May 1, 2021.
- Log in to post comments