Joel Schofer's Career Planning Blog



Many of you have heard about the initiative to defer Social Security Tax from September to December 2020 for military and civilian federal employees. If you have not, it will be happening.?Here are the key points:This is not optional, military members are not allowed to opt out.It will impact everyone whose monthly base pay is $8,666 or less. This means ALL LCDRs, All CDR’s with less than 16 years of service, and any CAPT’s with less than 14 years of service.This is a deferral, NOT A WAIVER of the tax!!! You will still have this tax taken out of your pay eventually, from January to April 2021. PLAN FOR WHATEVER AMOUNT YOU NORMALLY HAVE TAKEN OUT MONTHLY (see below) TO BE TAKEN OUT the first 4 months of 2021.?The Social Security tax (FICA-SOC SECURITY on your LES) will not be withheld. This tax is 6.2%. The approximate amount normally withheld can be found in the chart below.?BIG PICTURE: You’re going to have more money in your paychecks for September-December 2020 but you’ll have to pay that money back from January-April 2021. Plan/budget accordingly! My recommendation is to figure out what the difference is and save it in either your checking account or in a separate account to ensure you’re not going to have any issues in early 2021.?MONTHLY SOCIAL SECURITY TAX NORMALLY WITHDRAWN MONTHLY BY RANK AND YEARS IN SERVICE ................
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