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Trump Administration Confirms It Will Reduce Military Families’ Paychecks In 2021

Following initial reporting from Federal News Radio on Friday night, the Trump Administration confirmed over the weekend that all members of the United States military in the income range specified by President Trump’s executive order will have their Social Security payroll taxes deferred. The Defense Finance and Accounting Service (DFAS), which administers payroll for Department of Defense employees, wrote that “no Payroll Providers, Departments/Agencies, or service members will be able to opt-in/opt-out of the deferral.”

The decision will cause an increase in paychecks until just after the 2020 election as taxes are deferred, and then a larger decrease as taxes are reinstated and deferred taxes deducted from the paychecks of military families in January.

“Thanks to Donald Trump, military families will see their paychecks reduced in January,” said Rep. Beyer. “The President’s order will give the illusion of pay increases until after the election, and then require service members to pay the money back with double tax withholding. This is a disgraceful way to treat those who serve and sacrifice to keep us safe, and Trump’s trickery is obviously designed to help his campaign. Trump may try to deny reporting that he called our fallen heroes ‘suckers’ and ‘losers,’ but his actions here show undeniable disrespect for military families.”

The clarification that payroll taxes will be deferred for members of the military without the ability to opt out was posted during Labor Day weekend. Citing Treasury Department guidance, DFAS’ posting informs service members that “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… Deferral of the Social Security tax only postpones when the taxes are due.”

President Trump’s Executive Order “deferring payroll tax obligations” was initially issued on August 8. Business groups previously rejected the order as “unfair” and “unworkable.”

In the absence of participation by the private sector, the Trump Administration announced that it would require federal workers to have their payroll taxes deferred. Beyer and other Democrats in Congress objected, pointing out that the chaotic rollout of the policy would confuse many and ultimately hit workers with unexpectedly large hits to their paychecks next year. Beyer, who represents the largest number of federal workers of any Representative, led Ways and Means Democrats in a letter seeking clarity on the confusing and contradictory statements by the Administration.

On Friday, House Democrats introduced measures sponsored by Rep. John Larson (D-CT) to overturn President Trump’s executive action deferring payroll taxes, as well as a resolution of disapproval of the measure under the Congressional Review Act. Beyer is a cosponsor of both bills.