IBC Implements Payroll Tax Deferral

9/11/2020
Last edited 9/17/2020

This notification provides information on the Interior Business Center’s implementation of the Payroll Tax Deferral issued by the President on August 8, 2020.

IBC is working towards implementing the Payroll Tax Deferral for pay period 19 with an electronic funds transfer (EFT) pay date of September 18, 2020, or September 22, 2020, depending on your agency pay calendar. According to OMB direction, the following will apply:

  • The payroll tax deferral includes the 6.2% employee portion of Old Age Survivors Disability Insurance (OASDI) or commonly referred to as Social Security tax.
  • Per OMB direction to executive branch agencies, the tax deferral will be implemented with respect to all executive branch federal employees whose pay (including locality pay) during any bi-weekly pay period is less than $4,000, or the equivalent amount with respect to other pay periods.
  • Judicial Branch agencies may decide whether to opt-in or opt-out. The IBC will separately provide additional information to our Judicial Branch agencies.
  • Payroll tax deferral will continue through December 2020, ending in pay period 26 with the EFT pay date of December 24, 2020, or December 29, 2020, depending on your agency pay calendar.
  • Employee Leave and Earnings Statements (LES) will show OASDI contributions have been deducted, but the LES message will clarify that net pay includes an OASDI deferral.
  • The payback period for deferred taxes will occur between January 1, 2021, and April 30, 2021.
  • Determination is still pending regarding the future tax collection process, tax reporting of the deferral, and who owns the debt.

The IBC will continue to work with the OMB to finalize the requirements to ensure programming is completed in compliance with the memorandum.


Questions:

If you have any questions, please contact the Customer Support Center.

References:

Was this page helpful?