Sync.com - private cloud

Military Tax Deferment Calculator

PT Calculators

Some links may be affiliate links. We may get paid if you buy something or take an action after clicking one of these. Disclaimer

Beginning September 15th, 2020, service members will see a larger than normal paycheck. President Trump signed an executive order that allows companies to not withhold Social Security (Old Age, Survivors, and Disabilities Insurance (OASDI)) from September 2020 to the end of December 2020. This is only a deferment and will need to be paid at a later date. Military members will not be able to opt-out of the deferred Social Security tax withholdings. With that said, all military members who had a monthly basic pay of less than $8,666.66 will not have Social Security tax deducted from your pay. Beginning January 2021 and ending April 2021, the normal Social Security tax withholdings will continue plus a makeup tax withholding in order to recover the Social Security tax that was deferred. After April 2021, only the normal Social Security tax rate will be withheld.

 

Service members will see an increased paycheck over the next four months and then a much smaller paycheck from January to April. This is not free money by any means. This is only deferred taxes which will be recouped come January. On your Leave and Earnings Statement (LES), you will see Social Security listed as “FICA-SOC SECURITY” under the deductions section. This amount is set by law at 6.2% of the military member’s basic pay.

 

It is highly recommended that you do not spend this increase in pay over the next four months and instead, place this into a savings account where it will not be touched until January 2021. Then use the savings to supplement the decreased paycheck between January and April. You can use the calculator below to see how much you will need to pay back come January based on your current pay rate.

 

PrivateThrifty.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Stay in Touch

As an Amazon Associate I earn from qualifying purchases

We partner with Rakuten Marketing, who may collect personal information when you interact with our site. The collection and use of this information is subject to the privacy policy located here.

Disclaimer: This is a private website that is NOT affiliated with the U.S. government, U.S. Armed Forces or Department of Veteran Affairs. U.S. government agencies have not reviewed this information. This site contains information about GI Bill benefits, VA loans, news and services for military veterans and is not connected with any government agency. GI Bill® is a registered trademark of the U.S. Department of Veterans Affairs (VA). The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

© PrivateThrifty and privatethrifty.com, 2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to PrivateThrifty and privatethrifty.com with appropriate and specific direction to the original content.