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Thread: All federal employees will be subject to Trumpís payroll tax deferral

  1. #1

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    Default All federal employees will be subject to Trumpís payroll tax deferral

    Looks like this one will affect more than just military branch. Payroll tax will be deferred for a few months so it appears we'll have more money to spend?

    I'm lost.

    The Coast Guard was the first military service to publicly inform its members that theyíd be subject to the changes. In a message to the workforce Friday morning, the service said it will defer a 6.2% tax on employee wages and basic pay for military members from September through December, and that the deferrals are ďnon-negotiable.Ē

    The payroll tax deferral applies to all Coast Guard military members who make $8,666 a month or less, the notice said.

    As Federal News Network previously reported, civilian employees whose gross, biweekly wages are $4,000 or less are also subject to the payroll tax deferral.
    https://federalnewsnetwork.com/pay/2...-deferral-too/


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  3. #2

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    It will come back out of next year's paychecks, more than likely. double-deduction until repaid. As for people who plan on retiring between now and year-end, it may come out of FERS retirement income, or else we get a separate bill to repay the Treasury. or...or...or, we never have to pay it back (and don't get SS retirement credit either), but that requires congressional action if so, if I understand what I've read on the subject.
    "life can only be understood backwards, but it must be lived forwards" - soren kierkegaard

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  5. #3

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    Just like the $1.5T tax cut we got in 2019 and then most of us had to pay or got a lot less back when we filed taxes for 2019. It looks good up front but then sticks it in the ....
    I'm not for it.
    Also it only looks good for those that are working. What about the millions still out of work? It doesn't do squat for them and they are the ones that really need the help.
    Just saying.
    May the force be with us.

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  7. #4

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    Definitely not a good deal. I'll probably put it in savings to make up for any smaller checks down the road.

    Federal employees and military members will be expected to pay deferred taxes back starting next January and through April, though neither the administration nor individual payroll providers have described in detail exactly how that will work.

    Based on the messages that agencies and payroll providers have sent to their employees, which Federal News Network has reviewed, the expectation is that employees will pay deferred taxes back in installments from January through April 2021.

    Previous IRS guidance mentioned employees may face interest and penalties if they fail to pay deferred taxes back by April, but there are few other details.
    https://federalnewsnetwork.com/pay/2...-back-in-2021/

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  9. #5

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    I decided to dump mine into the Roth IRA which means it will be maxed out before year end if this deferral continues.

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  11. #6

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    I'll bet my money on: It will be forgiven when the Social Security tax is taken out again. It will not have to be repaid.

    Politicians have been 'investing' your Social Security 'assets' in trash for half a century. What is the functional difference between not taking it or 'investing' it in something with no or negative return. The future politician will just forgive the debt and go into more debt.

    Regardless, I would keep the money handy. If a future politician grabs it - via a claw back - than you would be better off just saving it in a checking account.
    Lookin' up at the 'G Fund'!!!

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  13. #7

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    So should we take total of whatever was deferred and now divide by 26 to ballpark what we can expect to be taken out in 2021? I also see the 1% pay raise in there which I'll happily take, but that's already gone due to health care.

    Now, federal employees and service members will have 12 months instead of the original four to repay previously deferred taxes.

    Exact repayment details are still unclear, but federal employees and military members will likely have this yearís deferred taxes taken out in gradual installments through their 2021 paychecks.
    https://federalnewsnetwork.com/pay-b...payroll-taxes/

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  15. #8

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    And, now comes the poison pill of poison pills. The Social Security clawback is about to begin

    Military Members -
    For active duty military members, the 2020 deferred Social Security taxes will be collected in 24 installments, from your mid-month and end-of-month pay between January 1 and December 30, 2021.

    For reservists and guardsmen performing intermittent duty in 2021, the amount collected may not be the same every pay period. DFAS will collect 2% of net available from each weekly, mid-month and end-of-month pay, and will continue until the deferred taxes have been repaid in full.

    Beginning in January 2021, your myPay LES will reflect the monthly collection amount and contain a note in the remarks section that shows the remaining balance of deferred Social Security taxes.

    Civilian Employees Ė
    The amount of Social Security taxes deferred in 2020 will be collected in 24 installments between pay-periods ending January 16 and December 4, 2021.

    Beginning in January 2021, your myPay LES Remarks section will include the 2020 deferred OASDI collection amount in that pay period, as well as the remaining balance to be collected.

    If you separate or retire prior to the deferred Social Security tax being collected in full the unpaid balance will either be collected from your final pay or you may receive a debt letter with instructions for repayment.
    I really hope we haven't started to live on that deferral, but I know folks have and think it is the normal state of being...

    I think the previous el-presidente would have 'forgiven' the debt, but the incoming el-presidente cannot politically make the same move. To 'forgive' that debt means that his priorities require in-the-clear borrowing while demonstrating that Social Security is not sacrosanct. I mean, is a system everybody thinks is the Federal Gubmints secret slush fund really 'the third rail of politics'? However, not forgiving that debt will start a 'discussion' on the value of Social Security. GenXers and Millenials - who have been conditioned to believe Social Security will be broke when they need it - will get a good strong look at how much they are paying into that retirement 'investment'. Many will not remember what their take home pay was before the deferral, they will react to the cut as it is.

    For me, the after tax pay cut will be over $250/month for the 24 pay periods starting January 28th.

    What will it be for you? Would you rather put that in your TSP?

    Lookin' up at the 'G Fund'!!!

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  17. #9

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    Mine will be ZERO!
    04/15/2021
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  19. #10

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    So we have to pay it over the course of the entire year? I was hoping to get it over with by April and it'd be over by the time I get my step 5 promotion lol, so it'd seem like a nice pay raise rather than just a return to normal. Smaller checks over the course of a year would just feel like a pay cut. I choose to live well below my means so having to pay it back in 3-4 months wouldn't really be a problem for me.

    I did the same thing Bullitt did, maxed out my Roth IRA and put the rest in investments. At least that cash is making money for me right now
    I trade based on volume + price action. Price action alone only tells half the story.

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  21. #11

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    I think it was silly to defer the tax for government employees that have not missed a paycheck. Got two months I was paid to just sit at home.


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  23. #12

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    Default Re: All federal employees will be subject to Trumpís payroll tax deferral

    The best part about all of this is some of my co-workers had no idea what it even was and just started living off it. Some of the more prudent ones deposited into savings but when Christmas came, it was easier to use that to pay for things. The "overpaid" ones didn't have to worry about it because they weren't included.

    I was going to put it into savings and just pay it back over the next year, but decided to just put it into the Roth IRA for the max after recognizing that after taxes and the payback period it was losing proposition. (I gambled that payback would be either forgiven or spread out over the year). I don't plan on maxing out the Roth IRA again this year, but the opportunity was there and in the end it's really time in the markets that matters.

    I did some rough computations and it looks like this year's paycheck will be less than last year with the increase in healthcare and SS payback. Luckily my wife's work didn't even give employees the option, they just said no.

    Biden could very well forgive this debt as it's a "stain" from the previous administration. Not counting on it, but also not counting it out. Left or right, I think it was a bad deal. As I said before, if you put it into savings, you'd lose money over 2021.

    Sniper: Mine should be right where you are, around $250 in 2021 per paycheck compared to $215 in 2020.

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