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UPDATE: Period extended for collecting deferred 2020 Social Security taxes

A graphic depicting an "update" to the payroll tax deferral.

The Consolidated Appropriations Act, 2021 was passed and extended the period for collecting deferred 2020 Social Security taxes. The period for collection is now Jan. 1, 2021, through Dec. 31, 2021, (instead of Jan. 1, 2021 to April 30, 2021). (U.S. Air Force graphic)

(Editor's note: This article was compiled from the Defense Finance and Accounting Service website. Visit www.dfas.mil for the most up to date military and civilian pay information.)

At the end of December, the 2020 Social Security tax deferral ended. 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.

Per IRS guidance (as modified by the Consolidated Appropriations Act, 2021), the Social Security taxes deferred in 2020 will be collected from pay between Jan. 1 and Dec. 31, 2021, (instead of Jan. 1, 2021 to April 30, 2021.)

Military Members
For active duty military members, the 2020 deferred Social Security taxes will be collected in 24 installments, from your mid-month and end-of-month pay between Jan. 1 and Dec.30, 2021.

For reservists and guardsmen performing intermittent duty in 2021, the amount collected may not be the same every pay period. DFAS will collect 2% of net available from each weekly, mid-month and end-of-month pay, and will continue until the deferred taxes have been repaid in full.

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 24 installments between pay-periods ending Jan. 16 and Dec. 4, 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 the unpaid balance will either be collected from your final pay or you may receive a debt letter with instructions for repayment.

Background
Pursuant to IRS Notice 2020-65 and at the direction of the Office of Management and Budget and Office of Personnel Management, Social Security (Old Age, Survivors, and Disability Insurance) or “OASDI” tax withholdings were temporarily deferred from September through December 2020 and will be collected from wages paid between Jan. 1, 2021 and Dec. 31, 2021, for employees who had wages subject to OASDI of less than $4,000 in any given pay period. These actions were in response to the Presidential Memorandum issued on August 8, 2020.

See the Military and Civilian FAQs at www.dfas.mil/taxes/Social-Security-Deferral/ for more information.