What This Letter Means
Letter 289C, Approval of Military Deferment, is good news. You asked the IRS to delay collection of income tax because your military service affected your ability to pay, and the IRS approved it. The letter explains the terms of your deferment.
The relief comes from the Servicemembers Civil Relief Act. To qualify, you had to be performing military service, show your ability to pay was materially affected, and have all required returns filed. Materially affected generally means your military pay is less than what you earned right before you entered service.
How the Deferment Works
- Collection of the deferred income tax is delayed during your military service.
- You have up to 180 days after you're released from military service to pay.
- If you pay in full by the end of the deferral period, you aren't charged interest or penalty for that period.
- The IRS monitors your account until the deferral period ends.
What It Doesn't Cover
The deferment applies to income tax. It doesn't cover your share of Social Security and Medicare taxes. Publication 3, Armed Forces' Tax Guide, has more on that.
What to Do
- Keep this letter with your service records.
- Mark the date your deferral period ends: your release date plus 180 days.
- Plan to pay the balance in full by then. After the deferment period, normal balance due procedures resume.
- Keep filing your returns on time.
If you can't pay in full when the deferral ends, contact the IRS before that date about a payment plan or other options.
If you're a service member with an IRS balance and want help planning for the end of your deferment, call us at (813) 229-7100.