On August 8, 2020, President Trump released three memoranda and an executive order addressing payroll tax, student loans, evictions, and benefits for lost wages.
Here’s what you need to know:
Memorandum 1: Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster
This memorandum instructs the Secretary of the Treasury to “defer the withholding, deposit, and payment” of old-age, survivors, and disability insurance tax liability from September 1, 2020 through December 31, 2020, subject to (1) employees whose wages or compensation, as applicable, is less than $4,000 (pre-tax), or the equivalent amount of other pay periods, and (2) deferrals shall be provided “without any penalties, interest, additional amount, or addition to the tax.”
The Secretary is also instructed to provide guidance to effectuate this order, as well as explore methods to forgive any deferral.
Some aspects of this legislation are ambiguous and require further clarity pending future legislation, guidance, or executive orders. Here are some topics that may require further clarification:
- Interpretation and application of the $4,000 qualification
- Employers must defer for all employees or only eligible employees
- Employer payment obligations, responsibilities, and liabilities
- Reporting requirements and any retroactive implications
Read the complete memorandum here.
Memorandum 2: Continued Student Loan Payment Relief During the COVID-19 Pandemic
Beginning March 20, 2020, the Trump administration alleviated student loan borrowers by temporarily suspending loan payments and reducing interest rates to 0%. This relief was intended to assist students and guardians stabilize their financial situations during the pandemic. The original relief was set to expire on September 30, 2020 but has been extended to December 31, 2020 as many are still facing financial hardships resulting from COVID-19.
Read the complete memorandum here.
Memorandum 3: Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019
The Trump administration has provided up to $44 billion from the Department of Homeland Security’s Disaster Relief Fund (DRF) to assist eligible claimants with lost wages and supplement State expenditures for allocating such relief. States are responsible for allocating temporary financial support to individuals whose jobs or wages have been adversely impacted by COVID-19. At minimum, $25 billion of DRF contributions will be directed toward ongoing disaster response and recovery efforts and potential 2020 major disaster costs.
This relief will be available for eligible claimants until DRF amount reaches $25 billion or for weeks of unemployment ending not later than December 6, 2020, whichever occurs first, for which the lost wages assistance program will be terminated.
The memorandum also advises, “To ensure that those affected by a loss in wages due to COVID-19 continue to receive supplemental benefits for weeks of unemployment ending no later than December 27, 2020, States should also identify funds to be spent without a Federal match should the total DRF balance deplete to $25 billion.”
For further details, read the full memorandum here.
Executive Order: Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners
This executive order provides guidance for government entities, such as the Secretary of Health and Human Services, Director of the CDC, Secretary of the Treasury, and Secretary of Housing and Urban Development, to use discretion in providing temporary relief to renters and homeowners where eviction may result in further spread of COVID-19. Where financial assistance is available, federal government entities are to provide temporary financial assistance to renters and homeowners facing financial hardships as a result of COVID-19.
Read the complete executive order here.