US military service members likely to pay double in FICA taxes for deferment payback

US military service members likely to pay double in FICA taxes for deferment payback
Service members within the U.S. military will get a rude awakening within the New Year once they see their taxes increase over four months to pay back a deferment given to them back in September.

President Trump’s payroll tax deferral policy was intended to supply financial relief and was applied automatically to some U.S. military salaries.

The deferral was automatic for civilian employees with wages but $4,000 per pay period and repair members with a monthly rate of basic pay of but $8,666.66, consistent with the Defense Finance and Accounting Service. There was no opt-out option for civilian or military employees. 


FICA taxes, which fund Social Security and Medicare, were deferred from the payroll tax, which is paid separately from federal income taxes. the chief order applies only to the Social Security obligation of 6.2%. Unless the deferment is forgiven by Washington before the top of the year, many service members are going to be forced to start out paying a complete of 12.4% on Jan. 1.

Veteran and military advocate Garrett Cathcart said the rise in taxes will put a strain on service members and their families who are already feeling the financial squeeze from the consequences of the COVID-19 pandemic.

"It was well-intentioned, right," Cathcart, a U.S. Army veteran who now is the chief director of Mission utterance , told Fox News. "How can we help service members and federal employees out during this COVID pandemic? But it had been a FICA tax deferral then service members had no choice. it had been applied automatically.

"A lot of parents never even knew what happened. And starting Jan. 1, [FICA] taxes will double to call all that back."

Cathcart and his organization are calling upon lawmakers in Washington to lift the mandate on baying back the taxes before the top of the year.

"It's quite sense ," he says. "Let's not have them pay taxes, but then, you know, due to Congress not acting and not working with the chief , now we're going take it all back."

"It's one among that sort of wonky, bureaucratic thing. But at end of the day, it's you recognize , the young soldier is that the one we're getting to get hurt."

Cathcart said Mission utterance surveyed nearly 900,000 veterans and discovered that almost 90% agreed that their paychecks shouldn't be docked by the IRS.

"We're trying to stay the govt open, but this could be one thing everyone should agree on," he said. "I quite desire Uncle Sam is being a Grinch immediately before Christmas."

Officials for the IRS didn't immediately answer requests for comment.

President Trump said back in September when he enacted the order that he would likely forgive all deferments, but as long as he was reelected.

Officials for President-Elect Joe Biden’s transition team didn't immediately answer an invitation for comment.

Back in September, a gaggle of over 20 senators urged the Trump administration to permit federal workers and military service members the choice to cop out of the deferral.

"Federal workers and repair members shouldn't be used as pawns for a payroll tax scheme that a lot of private sector employers are unlikely to hitch and where key questions remain unanswered," the senators wrote during a letter addressed to Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Russell Vought.


Active service members tell Fox News the rise in taxes could make things tough for military families.

"Having a tax deferment didn't help or hurt me," a United States Army major based in Kansas told Fox News. They asked that their name not be published thanks to media restrictions placed on service members.

"Majors, lieutenants, colonels, even some captains, really should be unaffected by this because they create enough money, and that they tend to be a touch bit better educated with the way to handle money. When this happened in September, my gut reaction was this is often getting to crush junior enlisted soldiers." 

"A private that creates 600 dollars a month before taxes like an 18-year-old kid -- maybe a touch bit older -- they do not skills to manage their money," the main added. "So, the fear is that when the payroll tax comes back, and everybody has got to pay it back. In a perfect world, everyone has quite had that cash sitting during a bank account just to offer back to the govt . But that's not the case. "

Fox News' Megan Henney and FOX Business' Brittney De Lea contributed to the present story.

Perry Chiaramonte may be a reporter and producer with Fox News Channel's Investigative Unit. Follow him on Twitter at @perrych
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