Fiscal Cliff Legislation Affects Military, Civilian Paychecks

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Fiscal Cliff Legislation Affects Military, Civilian Paychecks

WASHINGTON, Jan. 4, 2013 – The legislation that President Barack Obama signed Jan. 2 that postponed the fiscal cliff means changes to military and civilian paychecks, Defense Finance and Accounting Service officials said today. The legislation increases Social Security withholding taxes to 6.2 percent. For the past two years during the "tax holiday" the rate was 4.2 percent. The increase in Social Security withholding taxes affects both military and civilian paychecks, officials said. For civilian employees, officials said, this will mean a 2 percent reduction in net pay.

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