Temporary Social Security Payroll Tax Deferral

  • Published
  • By Airman 1st Class Julia Ford
  • 913th Airlift Group Public Affairs

In an effort to provide economic relief during the COVID-19 pandemic, a Presidential Memorandum was released, Aug. 8, along with guidance put out by the Internal Revenue Service, Aug. 28, to temporarily defer Social Security (Old Age, Survivors, and Disability Insurance (OASDI), tax withholdings. This will be effective through the end of the 2020 calendar year.

For military members, this deferral will be effective for the September mid-month paycheck. Defense Finance and Accounting Service will temporarily defer the withholding of 6.2% Social Security tax for members whose monthly rate of basic pay is less than $8,666.66. If the member’s monthly rate of basic pay is at or above this threshold, his/her Social Security tax withholding will not be affected by the deferral. The Social Security tax will be labeled as “FICA-SOC SECURITY” on military members’ Leave and Earning Statement and is calculated as 6.2% of their basic pay.

Due to differences in pay systems, application of the tax deferral process will be different for most members of the National Guard and Reserves, than for active duty members.

For these individuals, if they are eligible for the tax deferral, per the wage threshold, their initial net pay will have the Social Security taxes withheld. Three to four business days later, a separate paycheck will be issued to refund the Social Security taxes that were withheld from the initial pay. This will result in an additional LES labeled “FICA Refund” that members can track in MyPay.

Members are recommended to use their August LES statement or prior as a good reference to see exactly how much their Social Security tax amount is.

For civilian employees, this is effective for the pay period ending September 12, 2020. DFAS will temporarily defer civilians’ 6.2% OASDI tax withholding if their wages, subject to OASDI, are $4,000 or less in any given pay period. Employees can use the “Taxable Wages” on the LES as a reference for whether or not they will have OASDI taxes deferred.

Both military members and civilians are not eligible to opt-out of the deferral if their wages fall within the limits stated above. The deferral will happen automatically.

In accordance with current IRS guidance, collection of the deferred taxes will be taken from wages between January 1 and April 30, 2021. Additional information on the collection process will be provided in the future.

If a military member or civilian employee retires in 2020 before the collection process starts in 2021, they are still responsible for the Social Security tax repayment.

For questions regarding the temporary deferral of the 6.2% Social Security withholding:

For more information on financial readiness:

  • Reserve military members please contact the 913th AG Finance Office at: (501)-987-7762
  • Civilian employees please contact the 913th AG Finance Office at: (501)-987-2523
  • Please contact the Little Rock Airman and Family Readiness Center at (501) 987-2667 and ask to speak with the financial counselor or visit the Military OneSource page at https://www.militaryonesource.mil