While lawmakers have been unable to agree on the next phase of relief, President Trump has signed four executive orders to provide immediate economic relief. The executive orders address the following:
Unemployment payments: While the $600 per week additional unemployment payment instated in the CARES Act has lapsed, the executive orders reinstate an additional unemployment benefit of $400 per week through December 27, 2020.
Payroll tax deferral: Defer employee-portion only of certain federal payroll taxes for employees earning less than $100,000 annually on wages (defined as wages or compensation less than $4,000 per bi-weekly pay period or its equivalent for other periods) paid from September 1, 2020 - December 31, 2020. President Trump has authorized the Secretary of the Treasury to investigate means to permanently eliminate this obligation, otherwise the deferred taxes could become due and payable within a year. More clarity is needed on this important measure including, but not limited to, impact of year-end bonuses or other one-time payments, and payroll tax obligations for the self-employed individuals.
Relief for renters and homeowners: The executive order protects homeowners from foreclosure and tenants from eviction due to hardships caused by COVID-19.
Student loans: The moratorium on interest and principal on student loans has been extended to December 31, 2020.
Notably absent from the executive orders is the second round of stimulus payments. However, this does not mean that additional payments are not forthcoming, The initial round of stimulus payments was included in the CARES Act as a one-time payment. Funds for federal programs must be authorized through legislation passed by Congress and therefore the President cannot unilaterally approve an additional round of those payments. As lawmakers continue to discuss the terms of the HEALS Act, additional stimulus payments will likely be a part of the negotiations.
As always, our goal is to keep you informed of the changing legislation that may affect your financial outlook. The executive orders address specific aspects of relief and we anticipate additional relief legislation in the coming days. Please do not hesitate to reach out if we can be of assistance.