On August 8th President Trump signed four executive orders to extend federal pandemic relief. The four executive orders consist of the following:
1. Delay of payroll tax collection for those making under $100,000
This is a payroll tax deferral of 6.2% of Social Security taxes on wages for employees who earn less than $100,000 annually, from September 1 to December 31, 2020. Congress already deferred most employer payroll taxes for the rest of 2020, this order is attempting to defer employee’s payroll taxes. This means that workers will end up with larger paychecks while the tax is not collected. This is a tax deferral, meaning the taxes will still be due at some point in the future.
2. Extension of federal unemployment benefits
Federal unemployment benefits have been extended beyond the original July 31st expiration date but reduced to $400 per week for qualified persons through mid-December 2020. The catch – the federal government is only paying for $300 of that. Leaving states to figure out how to contribute the other $100.
3. Consideration of an eviction ban
This did not extend the federal ban on evictions, which expired on July 31, 2020. The order calls for the Health and Human Services and Centers for Disease Control and Prevention to “consider” whether an eviction ban is needed. President Trump also asks that they explore the options for temporary financial assistance to help renters and homeowners avoid evictions or foreclosures.
4. Defers student loan payments until December 31, 2020
The two parts to the order 1. waives all interest on student loans held by the federal government through the end of year and 2. allows people to delay payments until Dec. 31st. But again, the debt is not canceled forever but will be due at a later date. Principal payments are due on Dec. 31st and full payments are slated to restart January 1, 2021.
Currently, there is not much guidance on the orders put in place, and we are likely to see court challenges.
We will continue to monitor and provide updates as things become clearer. In the meantime, don’t hesitate to contact us. For more important COVID-19 resources and updates, visit our COVID-19 Resource Center.
