Skip to main content (Press Enter).
Defense Finance and Accounting Service
Providing payment services for the U.S. Department of Defense
Defense Finance and Accounting Service
Search Defense Finance and Accounting Service (DFAS):
Search Defense Finance and Accounting Service (DFAS):
Retired Military & Annuitant
Contractor & Vendor
Social Security Deferral
Civilian Employee FAQs
Social Security Tax Withholding Deferral
Civilian Employees Frequently Asked Questions
What is the deferred OASDI tax?
Social Security is 6.2% and is commonly referred to as OASDI. OASDI stands for Old Age, Survivors, and Disability Insurance program. The tax funds the Social Security program, which is administered by the Social Security Administration. Your OASDI deduction is found on your LES under the deductions tab/section.
Why are my OASDI taxes being deferred?
In order to provide relief during the COVID-19 pandemic, a Presidential Memorandum was issued on August 8, 2020, and guidance followed by Internal Revenue Service on August 28, 2020, to temporarily defer employees Social Security (Old Age, Survivors, and Disability Insurance) or “OASDI” tax withholdings.
Presidential Memorandum link:
When will the payroll tax deferral begin?
The elimination of the OASDI tax withholding on employee deductions for the applicable employees will be effective, pay period ending September 12, 2020A.
Can I opt-out of the deferred OASDI tax withholding?
No. The Office of Management and Budget (OMB) directed all Executive Branch Agencies to implement the tax deferral. As such, no Payroll Providers, Departments/Agencies, employees or service members will be able to opt-in/opt-out of the deferral.
How is the OASDI tax calculated?
OASDI tax is set by law at 6.2%. The tax is calculated as 6.2% of wages that are subject to OASDI. Wages subject to OASDI are gross wages less Federal Employees Health Benefits (FEHB), Dental, Vision, and Health/Flexible Spending Accounts (HSA/FSA). A good reference on your LES is your Taxable Wages listed on the Summary tab in myPay.
What is the wage threshold amount for determining who will have their Social Security tax (OASDI) withholdings deferred through the end of calendar year 2020?
If your wages subject to OASDI are less that $4,000 per pay period, OASDI taxes will be deferred. Wages subject to OASDI are gross wages less Federal Employees Health Benefits (FEHB), Dental, Vision, and Health/Flexible Spending Accounts (HSA/FSA).
Does premium pay (i.e. overtime) impact the OASDI tax deferral?
Yes, if the premium pay increases wages (subject to OASDI) to $4,000 or above in any given pay period, the OASDI tax will not be deferred. The tax deferral is calculated on a pay period-by-pay period basis and as such, will vary based on the employee’s wages at or above the wage threshold.
Tax Deferral Collection
Will I be required to pay back the Social Security taxes that are deferred?
Yes. Current IRS Guidance indicates the payment of the deferred taxes is postponed until January 1, 2021. The deferred Social Security taxes not withheld from wages during 2020 will be collected from your wages between January 1, 2021 and April 30, 2021. Additional information on the collection process will be provided in the future.
How much will my payroll provider collect during each pay period starting January 2021 through April 30, 2021?
The total amount of your 2020 deferred Social Security taxes will be collected on a prorated basis from your pay, divided evenly among pay periods starting January 2021 through April 30, 2021.
How will a civilian employee know the total amount of 2020 deferred taxes to be collected in 2021?
Using the final 2020 LES; the total Social Security tax deferral can be calculated by subtracting two amounts on the LES: OASDI year-to-date (deductions tab) from OASDI year-to-date (benefits tab).
Can the deferred Social Security tax liability be waived?
Only Congress has the authority to forgive taxes. Deferral of the Social Security tax only postpones when the taxes are due.
What will rate of collection be for the deferral?
In 2021, normal OASDI will be withheld from wages you receive in 2021 at a rate of 6.2%. Under current IRS Guidance, 2020 deferred OASDI taxes will be collected over a 4-month period. The rate of pay collected each pay period during this 4–month period in 2021 will depend on the total amount of taxes deferred in 2020 and will be different for each individual.
How will a pay raise, promotion or step increase in 2020 impact the collected amount of Social Security (OASDI) deferred taxes in 2021?
If your pay rate increases in 2020, but your pay is still below the wage limits for the deferral, the amount of deferred taxes will increase along with the increase to your pay. In 2021, you will be responsible for repaying the total amount of OASDI taxes deferred during 2020. Collection of the deferred taxes will be in addition to regular tax withholdings from your 2021 wages, including OASDI tax for 2021, calculated at 6.2% of your wages.
For example, if an individual receives a promotion in November 2020, the amount of deferred tax would increase because the 6.2% Social Security tax would be calculated on higher wages for the remainder of 2020. The total amount of tax deferred from September to December will be collected in 2021. However, if the promotion occurs in February 2021 there would be no impact on the amount of 2020 deferred taxes being collected in 2021.
How can a civilian employee calculate their deferred Social Security (OASDI) taxes to prepare for repayment in 2021?
The easiest way is to view the printable version of the LES. The difference between the Year to Date OASDI amount listed in the “Benefits Paid by Government for You” section and the OASDI Year to Date amount from the “Deductions” section will be the total amount of OASDI tax deferred. The Government is still paying its portion 6.2% OASDI employer contribution each pay period therefore, the difference between these two amount for Civilians will provide visibility to the 2020 deferred Social Security deferred taxes at any point in time.
Note: the "Tax Deferred Wages" line item on your LES is not the Social Security deferred taxes; typically this is the amount of Thrift Savings Plan (TSP) contributions used to reduce your federal and state taxable income.
I am separating from the service; will I be required to pay it back?
If you separated or retired in 2020:
If you separate or retire in 2020 before the Social Security tax can be collected in 2021, you are still responsible for the Social Security tax repayment. You will receive a debt letter with instructions on how to make payment.
If you are planning to or have separated in 2021:
If you separate or retire in 2021 before April 30 and before the Social Security tax can be collected in full, you are still responsible for the remainder of your Social Security tax repayment. The pay system will attempt to collect the remaining amount owed in full from your final pay check. If there is not enough applicable earnings on the final pay to cover the remaining amount owed you will receive a debt letter with instructions on how to make the remaining payment.
Can I increase my federal tax withholding in 2020 to avoid paying the amount of deferred Social Security (OASDI) taxes in 2021?
No. Increasing your Federal Income Tax Withholding (FITW) will not affect or cover the Social Security tax deferment.
What can I do to prepare for the expected changes in my pay when the deferred Social Security (OASDI) taxes are collected in 2021?
Individual situations will vary, but it is important to review the increase in your net pay so that you can plan for your pay to be reduced by roughly that amount in January through April of 2021, in addition to your normal 2021 tax withholdings. You can also consult with an Employee Assistance Program financial counselor or seek assistance from a private financial advisor.
Other Tax Deferral Impacts
Does this affect any of my other tax withholdings?
No. Pursuant to the Department of Treasury and the Internal Revenue Service Guidance, this only affects your Social Security tax withholding, which will be deferred from September 2020 through the end of the calendar year 2020.
Department of Treasury and the Internal Revenue Service guidance link:
How will this affect my 2020 and 2021 W-2?
Per IRS guidance, employees’ Social Security taxes deferred in 2020 and collected in 2021 will be reported on a Form W-2C for 2020.
Will I be required to file a 2020 amended tax return after receiving the Form W-2C?
Per IRS guidance, if the 2020 Form W-2C (Corrected Wages and Tax Statement) only contains a box 4 correction to account for the deferred Social Security tax in 2020 and withheld in 2021, an amended tax return is not required. However, if the individual had two or more employers in 2020 there may be additional steps required. See
, for further information.
How will the Social Security (OASDI) deferred taxes impact my federal and state income tax liability?
Federal and state income taxes are not impacted by this deferral. Your Federal and State income tax will be calculated in the same manner as it was before the deferral.
Does the Social Security (OASDI) tax deferral impact contributions to my Thrift Savings Plan (TSP) account?
No. The OASDI amount collected/deferred does not impact wages used to calculate your Thrift Savings Plan (TSP) contributions. Your TSP contributions will not be affected.
Page updated December 4, 2020