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Understanding the Social Security Tax Deferment

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Effective for the September mid-month pay, the Defense Finance Accounting Service (DFAS) will temporarily defer the withholding of your 6.2% Social Security Tax. All enlisted Soldiers and NCOs, as well as most Officers and DA Civilians, will see a 6.2% increase in their base pay starting with September’s mid-month pay through December 2020.   

As of now, you will have to pay this Social Security tax back January through April 2021.  

Bottom line, check your Leave and Earnings Statement and develop a plan. 

Key Facts:

– The Social Security tax is labeled as “FICA-SOC SECURITY” on the LES and is calculated as 6.2% of your basic pay.

– This change is effective through the end of the 2020 calendar year and only applies to your Social Security tax withholding.  Normal withholding of your FICA-Social Security taxes will resume effective January 1, 2021.

– You are not eligible to opt-out of the deferral if your basic pay falls within the stated wage 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. Additional information on the collection process will be provided in the future.

– If you separate or retire in 2020 before the Social Security tax can be collected in 2021, you are still responsible for the Social Security tax repayment.

As more information becomes available, it will be posted on: https://www.dfas.mil/taxes/Social-Security-Deferral/

For questions on the temporary deferral of the 6.2% Social Security 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:

– Visit https://finred.usalearning.gov/

– Visit your installation Military and Family Support Center and speak with a Personal Financial Manager or Counselor, or contact Military OneSource at

https://www.militaryonesource.mil