Time to pay back taxes extended

Military earners, federalworkers have all of 2021 to repay deferred payroll taxes, not just until April 30.

Military earners now have all of 2021 to pay back payroll taxes thatwere deferred last year, easingwhat had been a feared financial blow.

The 2021 Consolidated AppropriationsAct, passed by Congress just before Christmas and signed by President Trump late on Dec. 27, sets the period for collection of those deferred taxes as Jan. 1, 2021 through Dec. 31, 2021, according to the Defense Finance and Accounting Service (DFAS).

Previously, the repayment period had been more compressed, with payback due by April 30, 2021.

Mike Meese, a retired Army brigadier general and president of the American Armed Forces MutualAidAssociation, welcomed the news, but noted:

“It still means that, in spite of a nominal 3% pay raise, service members will still receive less in their paychecks every month in 2021 than they did during the last four months of 2020.”

“Some military families will be quite surprisedwhen their takehomepay fallsby severalhundred dollars just as bills from the holidays are due,” he added in an email Monday.

“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 frompay,” DFAS said in a recent notice.

Some background: President Trump in August directed that

Social Security taxes be temporarily deferred for service members and federal employees earning $104,000 or less.

The idea was to provide relief toworkers amid the pandemic-induced recession. But few private businesses participated, fearing the smaller paychecks expected in 2021.

The federal government’s legislative and judicial branches also opted out of the deferral, noted Tony Reardon, president of the National Treasury Employees Union, which represents federal employees, including about 3,300 Ohio IRS and Customs and Border workers.

Which left those serving in the military and federal administrative employees — those earning less than $104,000 a year — who were not able to opt out, however.

Beginning this month, the pay of militarymembersshould reflect the monthly collection amount. They should see a note in the “remarks” section of their Leave andEarningsstatementthatshows the remaining balance of deferred Social Security taxes, DFAS said.

The latest information can be found at https://www.dfas.mil/ taxes/Social-Security-Deferral/.