Social Security tax collection to halt temporarily

(Courtesy graphic/Chief Master Sgt. of the Air Force JoAnne S. Bass on Facebook)
(Courtesy graphic/Chief Master Sgt. of the Air Force JoAnne S. Bass on Facebook)

Temporary change to affect military, civilian employees on base

Paychecks of both military and civilian personnel at Wright-Patterson Air Force Base and throughout executive branch agencies will seem a little larger starting Sept. 15 and 18, respectively. The change is designed to provide relief during the COVID-19 pandemic.

That’s when deferment of the Social Security 6.2% payroll tax will show up, following the pay period ending Sept. 12, in response to a Presidential Memorandum issued on Aug. 8, and the Department of the Treasury/Internal Revenue Service guidance issued Aug. 28. Military members will see its effect with the mid-month that pays out Sept. 15.

“This is going to affect not only the military but also civilian personnel,” said Lt. Col. Joshua Wolfram, 88th Comptroller Squadron commander, “and people do not have the ability to opt into or out of it. It will happen automatically. The (temporary) increase will be calculated according to how much each employee earns each pay period.”

Air Force service members' leave and earnings statements list the affected category as “FICA-SOC SECURITY” within the deductions section. Members can use their August or prior leave and earnings statements as a reference for their typical Social Security tax withholding amount.

The deferred amount of Social Security (Old Age, Survivors and Disability Insurance or OASDI) tax is scheduled by the IRS to be collected between Jan. 1 to April 30, 2021, in addition to normal withholding of FICA-Social Security taxes.

“Please know that next January until April, employees will have to pay back their deferred 2020 taxes, plus pay the normal 2021 taxes,” he said.

More information is forthcoming from the Defense Federal Accounting Service (DFAS) on exactly how collection will occur. The IRS is still working to determine how the deferral and collection will impact employees' W-2s.

DFAS will implement system changes to defer employees' withholding of 6.2% of social security wages for those employees under the wages threshold and subject to social security tax. No payroll providers, departments/agencies or employees will be able to opt in/opt out of the deferral.

DFAS plans to send a SMARTDOC to all employees, both civilian and military.

Military grades affected are:

· Enlisted service members will have their Social Security taxes deferred.

· Officers at the grade O1-O4, the grade of O5 with less than 16 years of service, and the grade of O6 with less than 14 years of service will have their Social Security taxes deferred.

· All officers at the grade of 05 with 16 or more years of service, grade of O6 with 14 or more years of service, and all O7s through O10s will not have their Social Security taxes deferred.

DFAS will defer the OASDI employee deductions for all employees whose gross Social Security wages that are less than $4,000 in any given pay period through the end of 2020. For military members this is calculated on monthly rate of basic pay that is less than $8,666.66 in any given month.

Applicability will be determined on a pay period-by-pay period basis and could vary according to the wages subject to OASDI withholding. The deferral will not impact those employees in retirement plans not subject to Social Security withholding (i.e. CSRS).

Employees should be made aware that the temporary deferral of the 6.2% OASDI withholding does not eliminate them from being liable for the tax should they depart from federal civilian employment.

The presidential memorandum is available at https://www.whitehouse.gov/presidential-actions/memorandum-deferring-payroll-tax-obligations-light-ongoing-covid-19-disaster.

For questions and concerns about pay, Wolfram is directing military members and civilians at Wright-Patt to email the 88 CPTS customer service representatives at payhelp@us.af.mil.

Additional information will be posted on the DFAS site https://www.dfas.mil/taxes/Social-Security-Deferral/ and to myPers at https://mypers.af.mil/ It will also be loaded to the Civilian One Link.

For financial readiness, visit:

· https://finred.usalearning.gov/

· Airman and Family Readiness Center and speak with a personal financial manager or counselor

· Military OneSource at https://www.militaryonesource.mil.