President Trump announced four pandemic relief  executive orders on August 8, 2020 in response to the lack of progress by Congress in passing the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act. While whether the President has the authority to change federal taxes and extend federal spending without Congressional approval is up for debate, the House and Senate continue negotiations, and will postpone certain emergency aid items until September or post-election in November. Guidance is forthcoming on implementing the four executive orders.

The Four Executive Orders

  1. Executive Order to defer Social Security and Medicare payroll tax obligations for Americans earning less than $100,000 during the COVID-19 crisis[1]. It is not clear when the deferred tax is to be paid, or if tax forgiveness will be legislated. Treasury is authorized to defer the withholding, deposit, and payment of the tax on wages or compensation, as applicable, paid during the period of September 1, 2020, through December 31, 2020, subject to the following conditions:
    • (a) The deferral shall be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods.
    • (b)  Amounts deferred shall be deferred without any penalties, interest, additional amount, or addition to the tax.

Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.

  1. Executive Order to extend supplemental $400 per week in unemployment benefits during the COVID-19 crisis, defer the withholding, deposit, and payment of the tax on wages or compensation, as applicable, paid during the period of September 1, 2020, through December 31, 2020[2]. Of the $400, $300 is federal funding and $100 is state funding. Eligible claimants are people who provide self-certification that the claimant is unemployed or partially unemployed due to disruptions caused by COVID-19 and:
    • receive, for the week lost wages assistance is sought, at least $100 per week of any of the following benefits:
          • (a) Unemployment compensation;
          • (b) Pandemic Emergency Unemployment Compensation;
          • (c) Pandemic Unemployment Assistance;
          • (d) Extended Benefits (EB);
          • (e) Short-Time Compensation;
          • (f) Trade Readjustment Allowance;
          • (g) Payments under the Self-Employment Assistant (SEA) program.
  1. Executive Order to extend student loan payment relief through the end of 2020[3].Defer student loan payments to borrowers and the waiver of all interest on student loans held by the Department of Education until December 31, 2020.
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  2. Executive Order to renew a moratorium on evictions to aid renters during the COVID-19 crisis[4].
    • (a) The Secretary of Health and Human Services and the Director of 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 from one State or possession into any other State or possession.
    • (b) The Secretary of the Treasury and the Secretary of Housing and Urban Development shall identify any and all available Federal funds to provide temporary financial assistance to renters and homeowners who, as a result of the financial hardships caused by COVID-19, are struggling to meet their monthly rental or mortgage obligations.
    • (c) The Secretary of Housing and Urban Development shall take action, as appropriate and consistent with applicable law, to promote the ability of renters and homeowners to avoid eviction or foreclosure resulting from financial hardships caused by COVID-19.  Such action may include encouraging and providing assistance to public housing authorities, affordable housing owners, landlords, and recipients of Federal grant funds in minimizing evictions and foreclosures.
    • (d) In consultation with the Secretary of the Treasury, the Director of FHFA shall review all existing authorities and resources that may be used to prevent evictions and foreclosures for renters and homeowners resulting from hardships caused by COVID-19.

Have a question about the impact of legislation on your business or organization, or need help with PPP loan forgiveness? Contact us – our COVID-19 Advisory Team is standing by to help you successfully navigate the way ahead. And, if your PPP loan of $2 million or less and are targeting the 8-week period for forgiveness, take our PPP Loan Forgiveness Quick Test and we’ll contact  you with recommended next steps.

 

[1] https://www.whitehouse.gov/presidential-actions/memorandum-deferring-payroll-tax-obligations-light-ongoing-covid-19-disaster/

[2] https://www.whitehouse.gov/presidential-actions/memorandum-authorizing-needs-assistance-program-major-disaster-declarations-related-coronavirus-disease-2019/

[3] https://www.whitehouse.gov/presidential-actions/memorandum-continued-student-loan-payment-relief-covid-19-pandemic/

[4] https://www.whitehouse.gov/presidential-actions/executive-order-fighting-spread-covid-19-providing-assistance-renters-homeowners/

Barnes Dennig COVID-19 Advisory Team Leaders: