Close
Close

Deferred payroll tax recovery period extended

RFP
Tax Hot Topics newsletter 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.

Contacts:
Jeff Martin
Partner
Washington National Tax Office
T +1 202 521 1526

Keith Mong
Managing Director
Washington National Tax Office
T +1 202 521 1554

Kristen Smith
Director
Atlanta Office
T +1 404 475 0120

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.