Social Security payroll tax deferral
By Peterson-Schriever Garrison Public Affairs, Peterson-Schriever Garrison
/ Published December 30, 2020
PETERSON AIR FORCE BASE, Colo. --
UPDATE: The Consolidated Appropriations Act, 2021 was passed and extended the period for collecting deferred 2020 Social Security taxes. The period for collection is now January 1, 2021 through December 31, 2021 (instead of January 1, 2021 to April 30, 2021).
DFAS will update this website and send communications to the affected workforce explaining the changes made by the Act.
At the end of December, the 2020 Social Security tax deferral will end. Beginning January 2021, the normal 6.2% Social Security tax withholdings will again be deducted from pay for military members and civilians, and an additional deduction for the deferred 2020 Social Security tax collection taken from pay.
Background: Social Security (Old Age, Survivors, and Disability Insurance) or “OASDI” tax withholdings were deferred effective September through December 2020, for those military members with a monthly rate of basic pay of less than $8,666.66 and civilian employees who had wages subject to OASDI of less than $4,000 in any given pay period. This action was in response to the Presidential Memorandum issued on August 8, 2020, the Internal Revenue Service Notice 2020-65 issued August 28, 2020, and at the direction of the Office of Management and Budget and the Office of Personnel Management.
Military Members -
- For active duty military members, the total amount of 2020 deferred Social Security taxes will be collected evenly from pay between January 1 and April 30, 2021.
- For reservists and guardsmen performing only intermittent duty from January to April 2021, the collections may not be split evenly across pay periods. DFAS will collect 6% of net available pay each pay period. Collections may be extended past April 30, 2021 if the member does not earn enough pay to collect the 2020 deferred taxes before that date.
- Beginning in January 2021, your myPay LES will reflect the monthly collection amount and contain a note in the remarks section that shows the remaining balance of deferred Social Security taxes.
Civilian Employees –
- The amount of Social Security taxes deferred in 2020 will be collected in eight installments between pay-periods ending January 16 and April 24, 2021.
- Beginning in January 2021, your myPay LES Remarks section will include the 2020 deferred OASDI collection amount in that pay period, as well as the remaining balance to be collected.
If you separate or retire prior to the deferred Social Security tax being collected in full, you are still responsible for the remainder of your Social Security tax repayment. The unpaid balance will either be collected from your final pay or you may receive a debt letter with instructions for repayment.
Note, a Form W-2c may not be required for members who separated in 2020.
Still have questions? See the Military and Civilian FAQs and Fact Sheets for more information via https://www.dfas.mil/taxes/Social-Security-Deferral/.