My son is in the Navy. After doing his taxes for him, this W2c message was driving me crazy. I checked everything and found the FICA on his W-2 was understated. I "corrected" it (to 6.2 percent) and the W2c message went away. A review of his leave and earnings statement solved the puzzle. Here is the message on his DFAS Military Leave and Earnings Statement:
FROM SEP THROUGH DEC 2020 THE WITHHOLDING OF
YOUR SOCIAL SECURITY (FICA-SOC SECURIT) TAX
WILL BE DEFERRED IF YOUR MONTHLY BASIC PAY
RATE IS LESS THAN $XXXX.66. BEGINNING IN
JANUARY 2021, THE DEFERRED TAXES WILL BE
COLLECTED THRU APR 30, 2021. FOR MORE INFO
VISIT HTTPS://WWW.DFAS.MIL/TAXES/SOCIAL-
SECURITY-DEFERRAL/MILITARY-FAQS.
I guess the military didn't inform Turbo Tax that it was deferring FICA at the end of calendar year 2020.
You can find more on this on the DFAS website:
Defense Finance and Accounting Service > taxes > Social Security Deferral > Military FAQs (dfas.mil)
Here is what you will find.
Why were my Social Security taxes being deferred?
In order to provide relief during the COVID-19 pandemic, per a Presidential Memorandum issued on August 8, 2020, and Internal Revenue Service Notice 2020-65 issued on August 28, 2020, the Social Security tax withholdings of service members who met the wage threshold were deferred.
Note, the Social Security taxes are shown on Army, Air Force, and Navy Service Members’ Leave and Earnings Statements as “FICA-SOC SECURITY”) tax withholdings. The Social Security tax is labeled as “Social Security” on the LES for the Marine Corps.
Presidential Memorandum link: https://www.federalregister.gov/documents/2020/08/13/2020-17899/deferring-payroll-tax-obligations-in...
This should help those who are having issues related to the W2c if you are doing a tax return that includes military income. Hope this helps. Again, too bad nobody notified Turbo Tax. This is bound to reappear in 2021 as an overpayment (as the deferment is paid in 2021) if it goes ignored by Turbo Tax again.
