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During the weekend, President Trump signed an executive order and three memoranda for COVID relief.
This executive order bypassed Congress, so debates are underway on its constitutionality and whether it is indeed law. Until we receive definitive word on its status, we cannot advise or take action on any of its contents.
Here is what the executive order and accompanying memoranda propose:
Payroll tax cut
If enacted, the memorandum will include a "payroll tax holiday," giving employers the option to let employees defer certain federal tax deductions from employee paychecks from September 1 until the end of 2020 for those making fewer than $4,000 biweekly. The tax holiday would be a deferral and not an exemption, meaning people would still have to repay those taxes after the deferral period ends, unless there are exceptions.
The $600 per week unemployment benefits under the CARES Act expired on July 31. Under the memorandum, unemployment benefits would continue retroactively to August 1 at a rate of $400 per week, with $300 of those dollars coming from the Federal Emergency Management Administration (FEMA) fund and the other $100 from individual states.
The CARES Act banned late fees and eviction filings until July 25 on properties backed by federal mortgage programs, like Fannie Mae, or those receiving federal funds like HUD. The executive order is low on detail about extending those filings. It leaves the decision to Health and Human Services and the Centers for Disease Control and Prevention.
Deferrals for student loans obtained through the Department of Education currently expire on September 1. The executive order's accompanying memorandum moves to extend the postponement to the end of the year, with repayments beginning again January 1, 2021.
Since payments such as stimulus checks must pass through congressional negotiations, there is no mention of a second round of stimulus checks to individual taxpayers in the executive order.
So, where are we now?
Nothing is official yet. If the talks in Congress resume and both sides agree, then legislation could be introduced and voted on. If they agree on a deal in the coming weeks, and that deal results in the passage of a new bill, the executive action could be null and void.
At this point, we are not taking any actions related to the executive order and accompanying memoranda due to the uncertainty around it. Nextep continues to monitor the situation closely. We will let you know as soon as there is a more concrete law.