NFP organizations, like other employers, had a rough spell the last two years. In recognition of that, Congress provided for a deferral of the employer portion of payroll taxes due from March 27, 2020 until December 31, 2020 in the CARES Act. This was a deferral, and not a a forgiveness of these taxes. The chicken has now come home to roost. This is a reminder that 50% of the deferred balances must be deposited by December 31, 2021, with the balance due by December 31, 2022. Employers who do not make this deposit by year end will be subject to interest and penalties.
Given the fact the pandemic is still impacting many organizations, shouldn’t the IRS consider providing a more lenient repayment schedule? I can understand that remission of payroll taxes is out of the question, but many businesses and NFPs may struggle to make these payments. So, the runner-up in the 2021 Grinch election has to be the IRS.
Mark Koscinski CPA D.Litt. 