Deferred payroll tax recovery period extended


The IRS issued Notice 2021-11 to provide an extended period for employers to withhold and recover from employees any deferred employee Social Security taxes from the last four months of 2020. A previous presidential memorandum, and subsequent IRS guidance issued in Notice 2020-65, provided employers the option to defer the withholding of the employee portion of Social Security taxes (and railroad retirement tax equivalent) for wages paid from Sep 1, 2020, thru Dec 31, 2020. If elected, employers were required to withhold, pro rata, the deferred amount from wages paid from Jan. 1 through Apr 30, 2021. The Consolidated Appropriations Act, 2021 (H.R. 133) extended the pro-rata recovery period an additional eight months from Jan. 1 through Dec. 31, 2021.


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