President Trump signed four executive orders related to coronavirus relief. The four executive orders are intended to deliver relief through a range of measures, including expanded unemployment insurance, payroll tax deferment, student loan relief and a moratorium on evictions.
You may be wondering “what are the four executive orders?” or “what forms of relief are included in the orders?”
We know that coronavirus has impacted millions of Americans. The Treasury still needs to issue final guidance on the executive orders just signed, but TurboTax is here to break down what’s included in the four executive orders and will be here for you once final guidelines are issued.
The order calls for an expansion of unemployment aid providing Americans who are unemployed an additional $400 per week in federal unemployment insurance. This comes after the expiration of the $600 per week in federal unemployment under the CARES Act, which expired on July 31.
Payroll Tax Deferment (Updated with IRS Guidance 9/2/20)
The order calls for a payroll tax deferment or payroll tax holiday to defer payroll taxes for employees earning less than $100,000 per year. On August 28, the IRS issued some guidance on the payroll tax deferment, which defers the employee portion of social security tax.
The relief is available starting September 1, 2020 through December 31, 2020 and applies to bi-weekly taxable wages less than $4,000. Deferment of the employee portion of social security tax is not available for employees with bi-weekly taxable wages of $4,000 or more.
Payroll tax is the FICA (Federal Insurance Contributions Act) that is deducted from your paycheck to cover Social Security and Medicare tax. Social security tax is 6.2% of your earnings up to a wage threshold and Medicare is 1.45% of your earnings with no wage base limit. The 2020 wage limit for social security tax is $137,700.
Extended Student Loan Relief
Under the CARES Act, students could forgo paying their student loans through September 30, 2020 interest-free. The President signed the “Memorandum on Continued Student Loan Payment Relief During the COVID-19 Pandemic” with the intention of extending that relief through the end of the year.
Under CARES Act, the eviction moratorium protecting renters from eviction if they were in buildings with mortgages secured by the federal government expired the end of July. The fourth executive order may extend those protections for certain renters.
We’ve Got You Covered
We know that these are difficult times and want to help you understand what coronavirus relief means to you and how you can get access to or save money. Details of the executive orders are still being announced and the Treasury still needs to issue guidance, but you can be confident that TurboTax is here to keep you informed. Check back with the TurboTax Coronavirus Tax Center or the TurboTax blog for up to date information, advice, tips, tools, and resources to help you in this time of need.