As most people know the $600 per week Pandemic Unemployment Assistance (PUA) officially ran out on July 31st. While Congress is fighting over the next stimulus bill to pass, the President, yesterday August 8th, passed 4 executive orders. I am sure each will be challenged and there is uncertainty as to when and if some of these orders will be carried out however, I will highlight each of the four.
Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019. This order directs the Federal Emergency Management Agency (FEMA) to assist states with unemployment benefits. The order mentions that The Department of Homeland Security currently has in excess of $70 billion in emergency assistance funding available in the Disaster Relief Fund. The order directs up to $44 billion be used to pay 75% of PUA benefits. The order also requests states to kick in 25% of this PUA amount from amounts received through the Coronavirus Relief Fund. The order estimates more than $80 billion are available for this purpose. The amount of PUA is reduced from the $600 per week individuals were receiving through the CARES Act through July 31st to $400 per week. Again, the federal government would be paying $300 and each state would be $100. This is scheduled to stop when the $44 billion is exhausted or for the week ending December 6, 2020, whichever is later.
Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster. This order defers payment of the 6.2% withholding on employees that earn under $4,000 bi-weekly or the equivalent amount with respect to other pay periods. The deferral is applicable to payroll checks from September 1, 2020 through December 31, 2020. Currently the order defers the withholding and discusses the Treasury exploring avenues to eliminate this deferred obligation altogether. Meaning the payment would never be paid.
Fighting the Spread of COVID-19 by Providing Assistance to renters and Homeowners. The CARES ACT had issued a 120-day temporary eviction moratorium that expired in July. This order instructs the Federal Housing Finance Agency (FHFA), in consultation with the Secretary of the Treasury to “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”.
Continued Student Loan Payment Relief During the COVID-19 Pandemic. On March 13, 2020 student loan interest had been temporarily lowered to 0 percent, additionally payments of student loans were also temporarily suspended. Both provisions have been extended through December 31, 2020.
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Hang in there and stay safe,
Jeff Skolnick, CPA, M.S. Taxation