Trump says service members won’t have to pay back deferred payroll taxes — if he wins
President Donald Trump pledged that service members and Defense Department civilians won't have to pay back the extra money that will be in their paychecks through the end of the year under the payroll tax deferral plan — if he wins re-election in November
Editor’s note: This article by Richard Sisk originally appeared on Military.com, a leading source of news for the military and veteran community
President Donald Trump pledged that service members and Defense Department civilians won't have to pay back the extra money that will be in their paychecks through the end of the year under the payroll tax deferral plan — if he wins re-election in November.
In a Twitter post Thursday night, Trump wrote, “When we win I, as your President, will totally forgive ALL deferred payroll taxes with money from the General Fund.”
He also charged that former Vice President Joe Biden would “do the opposite” if he wins.
Trump essentially is promising a temporary pay raise, starting with the Sept. 15 pay period, that would last until Jan. 1. He also essentially is promising to reverse course on a plan pushed by his administration, which was opposed by Democrats and widely shunned by the private sector because of the hardship paying back the deferred taxes would cause.
Under the existing payroll tax deferral plan, the extra money would have to be paid back in the first four months of next year through larger withholdings, with penalties that have yet to be defined for late repayments.
Related: Trump’s tax break could hurt enlisted service members next year when the IRS docks their pay
Trump's promise would apply to all service members, DoD civilians and the entire federal workforce who qualify for the existing payroll tax deferral plan. Participation in the deferral plan is mandatory for service members, DoD civilians and federal employees.
It is not immediately clear how the promise would apply to the private sector. Under the executive order issued by Trump on Aug. 8, businesses can choose whether to participate in the payroll tax deferral plan, and many have voiced opposition.
A pay chart circulating in the Army gave examples of how much more in total pay service members who qualify for the deferral could expect to receive from Sept. 15 through the end of the year.
For an E-2, it is $481.74; for an E-7, it's $772.35; for an O-1, it is $815.20; and for an O-6, it's $1,718.94.
In guidance for service members issued last weekend, the Defense Finance and Accounting Service said, “Effective for the September mid-month pay, DFAS will temporarily defer the withholding of your 6.2% Social Security tax if your monthly rate of basic pay is less than $8,666.66.
“If your monthly rate of basic pay is at or above this threshold, your Social Security tax withholding will not be affected by the temporary deferral,” it added.
DFAS also made clear that the program is mandatory for service members and DoD civilians. Separate guidance from the Internal Revenue Service stated that the plan is mandatory for the entire federal workforce.
Service members and civilians “are not eligible to opt-out of the deferral if their Social Security wages fall within the stated limits. The deferral will happen automatically,” DFAS said.
This article originally appeared on Military.com
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