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Military Paychecks Will Be Smaller in January. Don’t Panic Yet

Most members of the military will get a base pay increase beginning in January, however their take home pay will be smaller temporarily.

But don’t panic, here’s why.  An order signed back in August deferred certain taxes for both military members and civilians.  This action gave you an increase in your 2020 paycheck, but requires the taxes to now be repaid.

So even though you will be getting a 3% pay raise in 2021, the deferred tax will lower your paycheck by approximately 6.2% for January through April.

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The order was originally initiated as a means of trying to help Americans during the pandemic.

During that time period Americans will see their Social Security, also known as Old Age, Survivors, and Disability Insurance (OASDI) payroll tax increase to around 12.4% instead of the usual 6.2% withholding rate. That extra withholding will be used to make up the shortfall in tax revenue created by the deferment of tax collections from the executive order.

For example, an E-5 with four years of service will see approximately $50 less per payday and an O-3 with the same amount of service will see about a $100 decrease each payday for the first four months of 2021 due to the Social Security tax deferral.

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The majority of military members were given no choice to opt out of the tax deferral, and will therefore see a temporary decrease in their paychecks the first several months of the new year.

There was one exception, and that was for those whose monthly military basic pay was more than $8,666.66.  They will not have to pay back taxes, as they were not eligible for the tax deferral to begin with.

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Comments

  1. MASTER SERGEANT CLARK N. JOHNSON JR, USMC/USA (RET) says

    As a 100% totally disabled combat veteran, this indicates that the Federal Government I GAVE 26 YEARS OF BLOOD, SWEAT, TEARS, INJURIES, FAMILY SEPARATIONS, DEDICATION, LOYALTY, so that this UNCARING, UNLOYAL, U.S. GOVERNMENT can take EIGHTEEN.SIX percent (6.2% OF MY PENSION, AND 12.4% OF MY DISABILITIES RECEIVED IN COMBAT) 18.6% AWAY FROM ME FOR FIVE (5) MONTHS, SO THAT I MIGHT SUFFER FOR WHAT TIME GOD MIGHT LEAVE MY 78 YEAR OLD DISABLED BODY ON EARTH

  2. Linda Davidson says

    Yep as usual make the military pay. We at the moment are a free nation because of the men and women in uniform who fought and gave their lives to make us free. Sickening to see what they go through when some come back with disabling wounds and go through what they do just to live. Government must be real proud of themselves.

  3. Pete Washburn says

    I presume this action will NOT apply to the august body of military veterans. and all others vacationing in Congress. And why not, they have excluded themselves from everything else that is paid for by those who have served in a REAL way as America’s military, paid taxes, medical expenses, while Congress sets their own salaries, benefits and all the other perks they get ONLY FOR THEMSELVES.

  6. Pete Washburn, 75 year old Military Veteran says

    By the way, when was the last time anyone in Congress took a pay cut?

  7. Rappsodi Ali says

    It so sad that veterans are giving less when in the beginning, We had given all We got—Our Lives to be subjected to such ingratitude attitudes…We All in this together… VETERANS LIVES MATTER…

  8. Mike Davis ‘68-‘69 BRO Vietnam. says

    Clark Johnson Jr. well said sarge! I to am 100% combat disabled, though Army Inf., but got your ‘6’ !!!!

  9. Robert says

    Sucks . Those assholes in Congress only take care of themself first and all of us who did our duty get shit .

  10. Robert E Bruce says

    This is the lie the out going president told everyone when he promised a tax break for all, but the top 1% were the only group to get a true tax break , the rest of us will be paying money back now and again in 8 or 110 years .

  12. Marvin Koch says

    This does not surprise me at all as pay increases are VERY SMALL in any event. We get the same from Social Security when they increase the DEDUCTIONS to offset the actual, SMALL increase in INCOME, if any at all year to year.

  13. Ruben says

    We need to have term limits for this Sorry Representative that supposably are their to support and work for our interest, The biggest lie there is, they are only interested in their pay check, their stocks, and becoming a member of the 1%. . That is who they really work for (themselves), inside information on their stocks, and been politically connection to other with same interest. look at what they are giving us $600.00 dollars I already spend that with my gas bill.