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January 21, 2021
2021-0142

IRS guidance extends time to repay 2020 deferred employee Social Security tax to December 31, 2021

In Notice 2021-11 the IRS announced that the period for ratably withholding employee Social Security tax that was deferred in 2020 is extended from April 30, 2021 to December 31, 2021.

The period that associated interest, penalties and additions to tax will be imposed on employers for the late payment of the 2020 deferred employee Social Security tax is also extended from May 1, 2021 to January 1, 2022.

Notice 2021-11 acknowledges provisions contained under the COVID-related Tax Relief Act of 2020, enacted as part of the Consolidated Appropriations Act, 2021 (Pub. L. 116-260) and, accordingly, modifies the 2020 guidance previously issued under Notice 2020-65 (see Tax Alert 2020-2149).

It is anticipated the IRS will update instructions for Forms 941, 941-X and W-2 to reflect these changes.

For background concerning the 2020 deferral of employee Social Security tax under the previous IRS guidance, including the Form 941 and Form W-2 reporting requirements, see our special report.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Debera Salam (debera.salam@ey.com)
   • Kristie Lowery (kristie.lowery@ey.com)
   • Kenneth Hausser (kenneth.hausser@ey.com)
Compensation and Benefits Group
   • Christa Bierma (christa.bierma@ey.com)

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