Tax breaks for all -- except some feds

Many federal employees excluded from tax holiday

Federal employees covered by the Civil Service Retirement System would not see a 2 percent “tax holiday” under a tax cut extension bill that the Senate passed today.

Under a compromise worked out between Republican congressional leaders and President Barack Obama, most people would get a decrease in the money held out of their paychecks, because the government for one year would reduce Social Security payroll taxes from 6.2 percent to 4.2 percent. However, because CSRS-covered feds don’t pay into the Social Security system -- they contribute to CSRS instead -- they would not get the break.

“NTEU believes this unequal treatment of federal employees is unfair, and urges that a one-year, 2 percent reduction in employee contributions to CSRS, or similar remedy, be included in any payroll tax holiday legislation,” National Treasury Employees Union President Colleen Kelley wrote in a letter to senators.

The Senate passed the bill by a vote of 81-19.

NTEU noted that those federal workers who would not receive the tax holiday will also be hit with the two-year pay freeze that Obama has proposed for the entire federal workforce. Federal workers covered under the Federal Employees Retirement System pay the same 6.2 percent of their pay into Social Security as is paid by private-sector workers and are covered under Social Security, Kelley said. They will receive the tax holiday if the bill is enacted into law, Kelley pointed out.

On a more positive note, the legislation does include language that would extend a $230 monthly transit subsidy for federal workers who commute to and from work on public transportation, Kelley said. Without the legislation, the subsidy was scheduled to revert back to $120 per month; the Senate bill would continue the extension of the higher subsidy for another year.

Featured

  • Cybersecurity
    Shutterstock photo id 669226093 By Gorodenkoff

    The disinformation game

    The federal government is poised to bring new tools and strategies to bear in the fight against foreign-backed online disinformation campaigns, but how and when they choose to act could have ramifications on the U.S. political ecosystem.

  • FCW PERSPECTIVES
    sensor network (agsandrew/Shutterstock.com)

    Are agencies really ready for EIS?

    The telecom contract has the potential to reinvent IT infrastructure, but finding the bandwidth to take full advantage could prove difficult.

  • People
    Dave Powner, GAO

    Dave Powner audits the state of federal IT

    The GAO director of information technology issues is leaving government after 16 years. On his way out the door, Dave Powner details how far govtech has come in the past two decades and flags the most critical issues he sees facing federal IT leaders.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.