Defense Finance and Accounting Service shares information on Social Security payroll tax deferral
INDIANAPOLIS (Sept. 8, 2020) – In order to provide relief during the COVID-19 pandemic, a presidential memorandum was issued on Aug. 8, 2020, and guidance followed from Internal Revenue Service on Aug. 28, 2020, to temporarily defer Social Security (Old Age, Survivors, and Disability Insurance (OASDI) tax withholdings. This change is effective through the end of the 2020 calendar year.
Military Members: Effective for the September mid-month pay, DFAS will temporarily defer the withholding of your 6.2% Social Security tax if your monthly rate of basic pay is less than $8,666.66. If your monthly rate of basic pay is at or above this threshold, your Social Security tax withholding will not be affected by the temporary deferral. Military members can use their August or prior Leave and Earnings Statement as a good reference for their typical Social Security tax amount. The Social Security tax is labeled as “FICA-SOC SECURITY” on the LES and is calculated as 6.2% of basic pay.
Civilian Employees: Effective with the pay period ending Sept. 12, 2020, DFAS will temporarily defer your 6.2% OASDI tax withholding if your wages subject to OASDI are less than $4,000 in any given pay period. Employees can use the “Taxable Wages” on the LES as a good reference for whether they will have OASDI tax deferred.
The OASDI deduction is found on your LES under the deductions tab/section.
Military members are not eligible to opt out of the deferral if their Social Security wages fall within the stated limits. The deferral will happen automatically.
Civilian employees are not eligible to opt out of the deferral if their Social Security wages fall within the stated limits. The deferral will happen automatically.
Per IRS guidance, collection of the deferred taxes will be taken from your wages between Jan. 1 and April 30, 2021, for both military members and civilian employees. Additional information on the collection process will be provided in the future.
If a military member or civilian employee separates or retires in 2020 before the Social Security tax can be collected in 2021, they are still responsible for the Social Security tax repayment. Additional information on the collection process will be provided in the future.
For questions on the temporary deferral of the 6.2% OASDI withholding:
Visit the IRS page: https://www.irs.gov/newsroom/guidance-issued-to-implement-presidential-memorandum-deferring-certain-employee-social-security-tax-withholding.
For more information on financial readiness:
Visit your installation Military and Family Support Center to speak with a personal financial manager or counselor, or contact Military OneSource at https://www.militaryonesource.mil.
Still have questions? For more information, see the FAQs on the DFAS website at https://www.dfas.mil/taxes/Social-Security-Deferral/.
(Defense Finance and Accounting Service)