On August 8, 2020 President Trump signed four executive orders mandating additional relief in response to the coronavirus pandemic. The executive orders focus specifically on student loan relief, extensions of unemployment benefits, payroll tax deferral, and eviction moratorium. While many details are still developing, below highlights what we can expect to see in coming weeks:
- Student loan relief. Under the CARES Act, loan payments were paused and interest suspended on federally-held student loans until September 30. This executive order extends these benefits until December 2020.
- Extension of enhanced unemployment benefits. The additional $600 weekly unemployment benefit mandated by the CARES Act has been extended at a decreased amount of $400 per week. Each state will be responsible for 25% of the $400 maximum benefit, though it’s unclear how individual states will respond, considering widespread financial difficulties within state governments.
- Payroll taxes deferral. This order postpones the 6.2% tax employees are responsible for paying toward Medicare and Social Security. Payments are deferred beginning August 1, 2020 thru December 31, 2020 for employees whose annual gross wages are less than $104,000 Employees that postpone this tax will be required to pay back the amounts postponed in 2021.
- Extension of eviction moratorium. While this order doesn’t outline specific funding, the new measure aims to help those most at risk for eviction in coming months by stating “the Secretary of Health and Human Services and the Director of the CDC shall consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary to prevent the further spread of COVID-19.”
Another round of stimulus payments to Americans was not included in Trump’s latest executive orders, but it is expected that Congress will continue to work to find common ground on a future bill that includes additional stimulus payments.
The media is reporting that these executive orders could be held up in court, but this is not a popular route for either party. This also does not mean that there will not be additional negotiations among Congress and the Senate with regards to the other items not addressed.
As always, please contact a member of your service team to discuss how any of these changes may impact your personal planning needs.