R 221540Z JAN 21
MSGID/GENADMIN/CMC WASHINGTON DC MRA MP//
SUBJ/COLLECTION OF 2020 SOCIAL SECURITY TAX DEFERRAL//
REF/A/MSGID:DOC/116 TH CONGRESS/27DEC2020 REF/B/MSGID: MSG/CMC WASHINGTON DC MRA/R221650ZSEP20 NARR/REF A IS SECTION 274 (EXTENSION OF CERTAIN PAYROLL TAXES), DIVISION M, TITLE II, OF THE CONSOLIDATED APPROPRIATION ACT, 2021. REF B IS MARADMIN 546/20 NOTICE OF TEMPORARY 2020 SOCIAL SECURITY TAX DEFERRAL//
POC/A.N HARGIS/CIV/UNIT: CMC(MPO)/EMAIL: ALAN.HARGIS@USMC.MIL/TEL 703-784-9386//
POC/K. CERNY/CIV/UNIT: CMC(MPO)/EMAIL: KERRY.CERNY@USMC.MIL/TEL 703-784-9386//
GENTEXT/REMARKS/1. Purpose. To advise military personnel and civilian employees that their Social Security tax withholdings deferred in 2020 will be collected from their pay in installments between 1 January and 31 December 2021 as required by reference (a). Originally, this deferred withholding was to be collected from their pay in installments between 1 January 2021 and 30 April 2021.
2. Background. Per reference (b), qualifying personnel had their Social Security tax withholdings deferred effective mid-month September through December 2020. Qualifying personnel were federal civilian employees earning less than $104,000 annually or $4,000 per pay period, enlisted Marines (except for Sergeant Major of the Marine Corps), warrant officers, chief warrant officers (except for CWO5 with 24 years and over), and officers (except for O-5 with 16 years and over, O-6, and generals).
3. Effective 1 January 2021, the normal 6.2 percent Social Security tax withholdings will be deducted and an additional deduction will be taken for the deferred 2020 taxes from the pay of qualifying personnel described in paragraph 2. The additional deductions will be collected in 24 equal installments between mid-month January through 31 December 2021, except as described below.
4. Beginning with the Leave and Earning Statement (LES) for January 2021, each month’s LES statement will reflect the additional withholdings collected during that month and will contain a remaining balance of deferred Social Security withholdings in the remarks section.
5. In January 2021, qualifying personnel will be issued a Form W-2 (Wage and Tax Statement) for 2020 that reflects the amount of Social Security taxes withheld in 2020. In January 2022, the same qualifying personnel will also be issued a Form W-2c (Corrected Wage and Tax Statement) for 2020 to reflect the collection of the deferred Social Security taxes. However, this does not change the deadlines established by the Internal Revenue Service (IRS) for filing 2020 income tax returns. The Form W-2C is for record purposes and only requires an amended tax return be filed if the qualifying individual worked for two or more employers in 2020 and his/her combined Social Security withholdings for the year exceeded $8,537.40. For example, if an individual is a reservist and a civilian employee who had $9,000 withheld from his/her paychecks for Social Security tax for calendar year 2020 (includes the collection of deferred Social Security taxes), the individual is eligible for a credit of $462.60, which represents the excess amount paid above the $8537.40.
6. Qualifying personnel who will separate or retire before 31 December 2021, and prior to the deferred Social Security tax being collected in full, are still responsible for the remainder of the tax repayment. The unpaid balance will be collected from the individual’s final pay. If there are insufficient funds to collect the full amount, the remaining unpaid balance will be collected through the out of service debt management process. A debt letter with instructions for repayment will be sent via U.S. Postal Service to these individuals. Payments can be made online via Pay.gov.
7. Qualifying personnel who are reservists will have their deferred Social Security tax collected from their pay as they complete drill periods and/or annual training (AT) from 1 January through 31 December 2021. 1/12th of the total repayment will be collected from their paycheck each month unless no drill or AT is performed. If no drill or AT is performed during the month, the amount that would have been collected for that month will carry over to the next month so that 2/12ths of the total repayment will be collected from the next paycheck. For example, a reservist who owes a total of $100 in deferred Social Security taxes will have $8.33 collected each month (1/12th of $100). If no drill/AT is performed in January, the $8.33 will be carried over to February and combined with February’s installment so that $16.66 is collected from the paycheck in February. If a reservist has not paid in full repayment by 31 December 2021, the unpaid balance will be collected in a single lump sum from the first their paycheck in 2022.
8. Generally, qualifying personnel can calculate the amount of Social Security deferred in 2020 by multiplying 6.2 percent times the amount of basic pay or drill pay received from September through December 2020, date of separation, or retirement, whichever occurred first.
9. Civilian employees should consult with their Human Resources Department for more details. Marines and civilian employees may access online information regarding the deferred tax collection period, visit: https:(slash)(slash)www.dfas.mil/taxes/social-security-deferral/. IRS information: https:(slash)(slash)www.irs.gov/newsroom/guidance-issued-to-implement-presidential-memorandum-deferring-certain-employee-social-security-tax-withholding. For information on financial readiness and specific guidance regarding a refund from the IRS for Social Security taxes withheld that exceeded the maximum amount, visit the nearest installation Personnel Financial Manager, or contact Military OneSource at https:(slash)(slash)www.militaryonesource.mil or https:(slash)(slash)finred.usalearning.gov/.
10. This MARADMIN is applicable to the Total Marine Corps Force.
11. Release authorized by LtGen David A. Ottignon, Deputy Commandant of for Manpower and Reserve Affairs.//