Details Emerge on Payroll Tax Deferral
As NTEU members received their paychecks for Pay Period 18, those meeting the criteria for the Social Security payroll tax deferral saw more money in their checks. Some employees were surprised to learn that their Social Security payroll tax was deferred, leaving employees to question whether the payroll tax was correctly deferred from their checks. According to the IRS, here is how employees can do the math to see if they are subject to the deferral. The tax agency says: “To validate the OASDI [Social Security tax] deferral is correct, employees should review their Earnings and Leave Statements. If the gross salary minus pre-tax FEHB, supplemental dental and vision premiums, flexible spending and health savings account deductions result in $3,999 or below, the OASDI was deferred correctly.” Employees impacted by the deferrals should have been told this before receiving their paychecks. This just speaks to the poor implementation of this program. Accurate and complete information has been scarce. As an employer, the federal government should do a better job communicating with employees. We are still waiting for information on how these deferred taxes will be collected in 2021. NTEU reminds employees that you may receive smaller paychecks from January to April of 2021 and encourages you to be financially prepared for that possibility by setting aside the extra money you are currently receiving. Watch NTEU National President Tony Reardon discuss the payroll tax deferral issue on Government Matters on Tuesday, September 22, 2020.