Military Personnel to See a Paycheck Increase, but Don’t Get too Excited
Many servicemembers, including all enlisted personnel, can expect to receive a paycheck increase beginning in September and lasting through the end of 2020.
But don’t get too excited just yet.
We have learned that come January 2021, you will likely have to begin repaying the money back.
Defense and military officials confirmed that active-duty military personnel and federal civilian employees will not be able to opt out of Trump’s payroll tax deferral program.
“The extra money we will get over the next few months, will be paid back next year,” Chief Master Sgt. of the Air Force JoAnne Bass stated.
She told leaders to make sure their Airmen and families are tracking everything to avoid potential financial issues in the future.
More on the deferral program from Stars & Stripes:
Trump last month directed the Treasury Department to allow employers to stop withholding the 6.2% tax on income that employees contribute to Social Security as a way to help workers during the coronavirus pandemic.
While employers in the private sector can decline to apply the tax deferral to their employees, participation is mandatory for active-duty members and civilian employees of the federal government whose social security wages fall within certain limits, said the Defense Finance and Accounting Service, which handles pay for 6.5 million military personnel, civilians and retirees.
For them, “The deferral will happen automatically,” DFAS said on its website.
The deferral will apply to civilians who make $4,000 or less per pay period, and military members who clear $8,666 or less of basic pay per month. It will affect all enlisted personnel, officers in ranks from second lieutenant to major; lieutenant colonels and colonels with less than 16 and 14 years of service, respectively, and all warrant officers, except those at a grade of W5 with 24 or more years of service, according to DFAS guidance.
The first paycheck increase for military members can be expected in their September 15 check.
Then beginning in January 2021, military members can expect a 12.4% decrease in their paychecks for the first 4 months of the year.
The repayments on the tax deferrals will be deducted from paychecks in even amounts from 01/01/2020 through 04/30/2020.
Soldiers and civilians should put together a plan to make sure they are prepared to continue meeting their financial obligations when they start seeing the decreased paychecks.
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