Repayment of Deferred Payroll Taxes Starts Feb. 19
Exchange associates whose payroll taxes were deferred in 2020 now have more time to pay back the taxes—as well as the flexibility to set the duration of their repayments.
Enacted via executive order in August, the deferral of Social Security payroll tax applied to about 24,000 Exchange associates making $4,000 or less per pay period between Sept. 1 and Dec. 31, 2020.
Per the order, the deferred taxes must be paid back this year via withholdings from associates’ wages. Originally slated for Jan. 1 to April 30, 2021, the repayment period was extended with the signing of the Consolidated Appropriations Act in late 2020.
What does this mean for Exchange associates?
- Associates now have from pay period ending (PPE) Feb. 19 through PPE Dec. 10 to repay payroll taxes deferred last year.
- Associates can choose the duration of repayments, selecting anywhere from one to 22 pay periods to repay taxes deferred last year.
“Before, the repayment process was determined for us—we had to take the payment out of the associates’ paychecks by the same amount it was deferred,” said Vice President and Controller Charlotte Stadler. “Now, associates can choose how long they’d like to extend their repayments.”
Associates will be able to select their preferred repayment period in Employee Self-Service using a tool that will advise how much will be deducted from each check based on individual deferment amounts and the selected repayment period. While back-end programming of additional features is still in the works, it will be ready before the repayment period starts.
“The thing we’ve heard loud and clear from the beginning is associates want a choice,” Stadler said. “The Exchange is happy associates can now decide what works best for them and their budget.”
Have more questions about the repayment of deferred payroll taxes? Check out this FAQ for more information.