Military, federal workers will likely get extensions for repaying deferred taxes
The $2.3 trillion omnibus spending bill and COVID-19 relief package passed by Congress Monday night includes an extended timetable for how soon U.S. troops and federal employees have to pay back deferred Social Security taxes, thereby reducing the hit to their paychecks next year.
Troops and civil servants have seen larger paychecks from September to December due to Trump’s August executive order that allowed employers to defer collecting the 6.2% Social Security payroll tax.
Many private employers declined to participate in the payroll tax deferral, but the military and the federal government did.
Starting in January, many service members would have faced double withholding for the first four months of the year to make up for the deferred taxes. But under the new spending bill, the timetable for repaying the taxes is extended through the end of 2021.
“Now military families and federal workers will see that repayment spread across a much larger number of pay periods, minimizing their short-term decrease in income,” Rep. Don Beyer, D-Va., a member of the House Ways and Means Committee who pushed for the extension, said after the spending bill was passed.
Both chambers of Congress passed the spending package Tuesday night, but it is unclear if President Trump will sign it.
“The bill they are now planning to send back to my desk is much different than anticipated. It really is a disgrace,” Trump said in a video Tuesday night.