The mistake meant about 7,400 soldiers sent to the Texas-Mexico border under Operation Lone Star were hit with higher-than-expected federal income taxes.
Federal employees and service members will be able to extend payments back to Social Security over 12 months, rather than the initial four-month timetable
The bill's Senate cosponsor, Chris Van Hollen, D-Md., called the decision to not pass legislation allowing feds and servicemembers to opt out of the program 'political cowardice.'
New Jersey Democratic Gov. Phil Murphy on Monday signed bipartisan legislation exempting combat pay earned by members of the military from the state income tax.
Department of Treasury Secretary Steven Mnuchin responded to concerns that federal employees and members of the military are required to participate in a new payroll tax deferral program.