With troops facing potential pay cuts because of deferred back taxes due at the beginning of next year, U.S. Senator Joni Ernst (R-IA), a combat veteran, is urging the Department of Defense (DOD) to issue an extension until October 2021 and to proactively notify military members and their families on exactly how much pay will be collected. Ernst also said that an extension would allow Congress time to consider legislative options to address the issue.
In her letter to DOD, Senator Ernst writes: “The coronavirus pandemic has presented many challenges for military families across the country. There are troubling reports of record numbers of military families who are seeking help from food banks because of spousal unemployment or other reasons such as needing to assist other family members. Notably, military servicemembers were not allowed to opt out or to provide consent for this deferment of their payroll taxes. I request that the Department of Defense further delay the collection of these taxes until October 1, 2021 so that military troops do not see their pay cut at this time and so that Congress may consider legislative options to address this issue.”
In August 2020, President Trump issued an executive order directing the temporary deferment of payroll taxes for military servicemembers, which is due to end after 2020. According to the Defense Finance and Accounting Service, servicemembers could lose 6-8% of their pay starting in January and continuing to the end of April 2021 as a result. For a young enlisted servicemember this may amount to over $300 per month being deducted from their pay. In her letter, Ernst is urging DOD to extend the deferment of payroll taxes for servicemembers through October 2021.
Senator Ernst’s full letter to DOD can be viewed by clicking HERE.
