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The financial boost Ramstein Airmen and Air Force civilians received in recent paychecks will be one more thing left behind in 2020.
To ease financial strain caused by the COVID-19 pandemic, a presidential memo signed Aug. 8, 2020, authorized the Defense Finance and Accounting Service to temporarily pause the 6.2% Social Security Tax withholdings from September to December.
Air Force senior leaders were quick to advise personnel not to treat this as “free money” as the tax collector would eventually come knocking.
“Bottom line: The extra money we will get over the next few months will be paid back next year. Leaders — make sure your Airmen and families are tracking to prevent financial strain in the future,” said Chief Master Sergeant of the Air Force JoAnne S. Bass in a September Facebook post.
As warned, repayment of last year’s deferred taxes begins this month in addition to reinstating Social Security tax withholdings for 2021. A recently-passed Consolidated Appropriations Act helps alleviate some money woes by spreading payments over the course of the year versus the original due date of April 30. The longer repayment period equates to smaller portions deducted per pay period.
Members do not need to take any action to repay the deferred taxes as it automatically comes out of paychecks. According to DFAS, military members and civilians can see their deferred tax collection and remaining balance on their myPay Leave and Earnings Statement.
“We highly encouraged personnel to exercise financial responsibility,” said Angie Fields, 86th Force Support Squadron community readiness consultant. “Still, we understand that it can be difficult to set money aside amid the pandemic and holiday spending season.”
For anyone struggling to understand the tax repayment or needing assistance to get finances in order, Ramstein’s Airman and Family Readiness Center is here to help.
“We offer several free education classes for personnel and their families. From January to March, classes include Developing a Spending Plan, Raising Financially Fit Children, The Basics of Credit Reports and Scores, and Saving and Investing,” said Fields. “We also offer one-on-one appointments to help answer questions on financial planning.”
A lesson many families learned last year is the importance of preparing for the unexpected. It never hurts to have extra money saved for a rainy day, or as was the case in 2020, a global pandemic.
Money issues can cause personal or marriage problems and even impact security clearances. Learning to manage money pays dividends and there’s no better time than the present.
