Delivered by Defense Finance and Accounting Service
Payroll Tax Deferral Information
In order to provide relief during the COVID-19 pandemic, a Presidential Memorandum was issued on August 8, 2020 and guidance followed by Internal Revenue Service on August 28, 2020, to temporarily defer Social Security (Old Age, Survivors, and Disability Insurance) or "OASDI" tax withholdings.
Effective pay period ending September 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.
- This change is effective through the end of the 2020 calendar year and only applies to your OASDI tax withholding.
- You are not eligible to opt-out of the deferral if your OASDI wages fall within the stated limits. The deferral will happen automatically.
- In accordance with current IRS guidance, collection of the deferred taxes will be taken from your wages between January 1 and April 30, 2021. At that time, OASDI withholding will resume at a rate of 6.2%, and deferred taxes from 2020 will be collected. Additional information on the collection process will be provided in the future.
- If you plan to separate, retire or transfer in 2020 before the OASDI tax can be collected in 2021, you are still responsible for the OASDI tax repayment.
- The deferral will not impact those employees in retirement plans not subject to Social Security withholding (i.e. CSRS).
As more information becomes available, it will be posted on:
If you have 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:
- Consult with an Employee Assistance Program financial counselor or seek assistance from a private financial advisor.
* Wages subject to OASDI: Gross wages less Federal Employees Health Benefits (FEHB), Dental, Vision, and Health/Flexible Spending Accounts (HSA/FSA).
Army.mil article: https://www.army.mil/article/238849
DFAS article: https://www.dfas.mil/taxes/Social-Security-Deferral/