Nonprofit Resources


Extended Payment Period for Deferred Payroll Taxes

On January 19, 2021, the IRS issued Notice 2021-11 with guidance on how employers who deferred the withholding and payment of employees’ portion of Social Security tax (i.e., the 6.2% FICA portion withheld from an employee’s paycheck) can withhold and ratably pay the deferred taxes through the end of 2021.

This is a change from the original April 30, 2021 deadline provided in Notice 2020-65, which was issued on August 28, 2020. The date was extended under the Consolidated Appropriations Act of 2021.

The new notice states:

An Affected Taxpayer must withhold and pay the total Applicable Taxes deferred under Notice 2020-65 ratably from wages and compensation paid between January 1, 2021 and December 31, 2021, or interest, penalties, and additions to tax will begin to accrue on January 1, 2022, with respect to any unpaid Applicable Taxes. If necessary, an Affected Taxpayer may make arrangements to otherwise collect the total Applicable Taxes from an employee.

The Notice also clarifies that because December 31, 2021 is a legal holiday, payments made on January 3, 2022 will be considered timely.

The deferral was enacted through a Presidential Memorandum on August 8, 2020, to provide financial relief during the COVID-19 pandemic.

Please contact us online or at [email protected] with any questions about how this may affect your organization.

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