My Coast Guard

Update: Payroll tax payback will be spread out through 2021

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If you are affected by the 2020 payroll tax deferral, your back taxes will now be collected over the course of the entire year. 

Add in the 2021 pay raises for both members (3%) and civilians (1%), and your take-home pay may be a little higher than you anticipated.

In August 2020, President Trump issued an executive order to defer the Old Age, Survivors and Disability Insurance (OASDI) taxes for many federal employees, both military and civilian, for the months of September, October, November and December. 

The IRS recently announced the back taxes will be collected the next 12 months. You don’t need to take any action, since the Coast Guard’s payroll providers will automatically collect the taxes from your paycheck. 

Here’s what you need to know.

Active duty members 

  • If you had payroll taxes deferred, the 2020 deferred OASDI taxes will be collected in 24 installments from your mid-month and end-of-month pay between Jan. 1 and Dec. 31. 
  • However, because of the 3% pay increase, you will actually see a slight increase in your take-home pay beginning mid-January.
  • If you have questions, contact Compensation@uscg.mil.

Reserve members (and those performing intermittent duty in 2021)

  • If you had payroll taxes deferred, you will see an increase in the OASDI deductions beginning mid-January.
  • The amount collected may not be the same every pay period. 
  • The Coast Guard will collect from each weekly, mid-month and end-of-month pay.
  • These collections will continue until the deferred taxes have been repaid in full.  
  • If you have questions, contact Compensation@uscg.mil.

Civilians

  • If you had payroll taxes deferred, you will see a decrease in your take-home pay beginning mid-January.
  • The deferred taxes will be taken from wages paid between Jan. 1 through Dec. 19 2021 (PP 26, 2020, through PP 25, 2021), known as the repayment period. 
  • The total amount of the 2020 deferred OASDI withholding will be collected on a prorated basis from pay, divided evenly among these pay periods.  
  • The National Finance Center has computed the total deferred amount by employee, which constitutes the total amount to be repaid. This amount will be divided by the 26 pay periods to compute a per-pay-period repayment amount. During the repayment period, the payroll system will calculate the normal pay period OASDI taxes based upon the OASDI wages earned in that pay period, and then add the prorated repayment amount calculated as defined above.  
  • The OASDI withholding will be reflected on your Statement of Earnings and Leave (E&L), starting in PP 26, 2020, which will be paid out on January 11, 2021.   
  • If you have questions, contact your servicing Human Resources Specialist.

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