On Saturday, August 8, 2020, President Trump issued Executive Orders that extended assistance to many Americans impacted by the Coronavirus.
President Trump directed the Treasury Department to allow deferral of the 6.2% Social Security tax on wages for employees making less than $104,000 a year. That suspension would last from September 1 through December 31, 2020. Obviously, if employers stop withholding those taxes, it delivers an immediate increase in take-home pay for employees. However, since the taxes are only deferred, it creates a looming liability in the future for those employees. Direction from the Department of the Treasury is forthcoming and should answer some of our questions.
Under the newly issued Executive Orders, roughly 43 million individuals with federally held student loans can suspend monthly payments through December 31, 2020. In addition, the government will waive interest on the loans during that period. Monthly payments have been suspended since Spring under the Cares Act, which had called for payments to resume after September 30, 2020.
The current moratorium on evictions that applied to properties with government-backed mortgages expired in July, but President Trump has instructed his administration to “take all lawful measures to prevent residential evictions and foreclosures related to the pandemic. The President didn’t prescribe those steps, instead leaving it to the Health and Human Services Department, the Treasury Department, and the Housing and Urban Development Department to find the funds and use existing programs and powers to help keep people in their homes.
The $600 per week federal unemployment benefit created by the Cares Act expired on July 31 and negotiators had been working towards extending a lesser amount. The President’s Executive order provides $400 per week in enhanced federal unemployment benefits through December 27th. States would, however, be responsible for $100 of this $400 enhancement to regular benefits.
Because of the financial nature of the orders, they will be challenged in court, and so we will have to see how it all plays out. For the time being, they have the signature of the President.
You can view the specifics directly from the White House website.
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