Payroll Tax Withholding Deferral

Prepare for upcoming changes to your taxes.
  • DoD will temporarily defer the withholding of your 6.2% Social Security tax through the end of the year
  • Deferred taxes will be collected from your wages between January, 2021 - April, 2021
  • Service members may not opt in or out of the deferral

DoD to temporarily defer Social Security tax withholding.

A Presidential Memorandum was issued on August 8, 2020 and guidance followed from Internal Revenue Service on August 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.

Social Security Payroll Tax Deferral

The Office of Management and Budget (OMB) directed all Executive Branch Agencies to implement the tax deferral.

Beginning with the mid-month September pay, DoD 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.

What you need to know

  • This change is effective through the end of the 2020 calendar year (September, 2020 through December, 2020), and only applies to your Social Security tax withholding. 
  • If your monthly rate of basic pay is at $8,666.66, or above this threshold, your social security tax withholding will not be affected by the temporary deferral.
  • Collection of the deferred taxes will be taken from your wages between January 1 and April 30, 2021.
  • You are not eligible to opt-out of the deferral if your basic pay or OASDI wages falls within the stated wage limits. The deferral will happen automatically. 
  • If you separate in 2020 before the Social Security tax can be collected in 2021, you are still responsible for the Social Security tax repayment. 

Current IRS guidance indicates the payment of the deferred taxes is postponed until January 1, 2021. The deferred Social Security taxes not withheld from wages during 2020 will be collected from your wages between January 1, 2021, and April 30, 2021. Additional information on the collection process will be provided in the future.

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 LES 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 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. 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 deduction’s tab/section.

For more information, visit your installation Military and Family Support Center to speak with a Personal Financial Manager or Counselor. Or, visit the Military OneSource website at militaryonesource.mil or, call Military OneSource at (1-800-342-9647).

Andrews Federal members received over $19 Million in direct member benefits through lower fees, lower loan rates and higher deposit yields.