On Saturday, August 8, the President issued several executive orders and memorandum intended to provide financial relief to both employees and the unemployed.
Social Security Tax Deferment
One memorandum directs the Treasury Department to defer employees’ obligations to pay Social Security taxes between September 1, 2020 and December 31, 2020. This deferment only applies to those who earn $104,000 or less annually. It does not provide any relief for employers’ withholding obligations. It’s important to note that the deferred taxes may have to be subsequently repaid unless Congress enacts legislation stating otherwise. Social Security taxes for these employees would be deferred without any penalties, interest, or addition to the tax. The Department of Treasury is expected to issue additional guidance later this week.
Supplemental Unemployment Benefits
The President also authorized supplemental federal unemployment benefits of up to $400 per week, down from the previous amount of $600 which expired on July 31. A timeframe for issuing the supplemental unemployment benefits has not yet been confirmed.
Student Loan Payments
In addition, the suspension of student loan payments will continue through December 31, 2020.
What’s next?
It is important to keep in mind that Congress and the Trump Administration are still negotiating on a potential COVID-19 relief measure and that a new bill could supersede the President’s actions detailed above. As additional information is released, we will provide updates on the next steps for employers.