President Donald J. Trump signed an executive order on August 8 that allows employers to defer withholding Social Security taxes.
However, it’s a payroll “deferral,” not payroll “forgiveness” — meaning it’s a temporary change, and service members and Defense Department civilians have to pay that money in 2021.
Internal Revenue Service officials said the Presidential Memorandum defers the employee portion of Social Security taxes. The Social Security tax is set for employees by law at 6.2 percent.
For service members, that would be 6.2 percent of basic pay. An E-5 with eight years of service has a monthly basic pay rate of $3,306.30. The monthly Social Security tax equals $204.99. Through the end of the year, this adds up to $819.96.
Beginning Jan. 1, 2021, the deferred Social Security taxes will be collected through April 30, 2021. So, that E-5 with eight years of service who received a total of $819.96 from the tax deferral now has to pay it back early in 2021.