We are still waiting for the dust to settle on what President Trump’s executive orders mean for taxpayers and business owners. There is a lot of talk about legal challenges and how Congress may react. But here is a summary of what we know now.
Temporary Payroll Tax Relief –
The President has directed the Treasury Department to grant all employers the ability to defer payment of the employee portion of payroll taxes from September 1 to the end of 2020. This is limited to employees earning less than $100,000 per year. While this seems like a tax cut, since paychecks will be larger, this is actually only a deferral of taxes since they will still be owed at a later date.
Unemployment Benefits –
The $600 Federal unemployment benefit expired at the end of July. Congress has been debating different levels to extend this benefit. The President has allocated $400 a week of Federal funds for Americans currently out of work. The funds will be available through December 6 or until the Disaster Relief Fund is reduced by $25 billion. But, States are required to make up $100 of the $400 in extended benefits.
Eviction and Foreclosure Hardships –
President Trump has directed his administration to prevent residential evictions and foreclosures resulting from financial hardships caused by the COVID-19 pandemic. Specifically, the executive orders state that the administration will take all legal measures needed to prevent this activity.
- Health and Human Services (HHS) and CDC will consider measures to temporarily prohibit residential evictions for failure to pay rent due to COVID-19 hardships in order to prevent the further spread of the virus.
- Housing and Urban Development (HUD) will prioritize federal funds that can be used to provide financial assistance to struggling renters and homeowners.
- HUD will also work with its grantees to ensure that renters and homeowners are not forced out of their homes during the COVID pandemic.
Student Loan Relief –
The President already took immediate action to relieve student loan borrowers by creating 0% interest and suspending loan payments, initially for 60 days, but now through the executive order, has been extended through the end of 2020. However, the debt is not canceled forever, with principal payments on Dec. 31 and full payments to restart on January 1, 2021. The administration believes that some taxpayers will use this period of 0% interest to more quickly pay down their student loans.
We have included links to each executive order to read through the details.
- Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster
- Fighting The Spread Of COVID-19 By Providing Assistance To Renters And Homeowners
- Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019
- Continued Student Loan Payment Relief During the COVID-19 Pandemic
There is talk of various legal challenges to the executive orders. It is unclear at this time how quickly or if the orders will be implemented. It would seem that Congress will need to act to provide a clear path forward. We will continue to monitor legislation and executive orders and will share progress when available.
“Serving Lake Wylie, Clover, Fort Mill, Rock Hill, Belmont NC, Gastonia, Charlotte and Surrounding Area Individuals and Small Business Owners”
Lake Wylie Tax Preparation Services | Rock Hill Tax Preparation Services | Gastonia Tax Preparation Services | Belmont Tax Services
Tax Return | Clover Tax Preparation Services | York SC Tax Preparation Services | Bookkeeping Services | Payroll Services
Photo Credit: Shutterstock