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Daily Briefing – 125

Post: Aug. 9, 2020

President Trump Signs Executive Orders After Coronavirus Relief Talks Falter

Today, President Trump signed four executive orders aimed at extending COVID-19 relief provisions as lawmakers continue to be unable to reach an agreement. 

The executive orders:

  • Defer payroll tax on wages paid from September 1 through December 31, 2020.
  • Extend enhanced unemployment benefits, but at $400 a week instead of $600.
  • Extend student loan payment relief.
  • Seek to protect renters and homeowners from eviction. 

The payroll tax deferral would appear to apply to the employee portion of the taxes for employees making less than $4,000 per bi-weekly pay period before tax (approximately $100,000 per year). (Social Security tax paid by employers was already deferred through the end of the year under prior relief legislation.) The tax is deferred without interest or penalties. The order contemplates the deferred amounts potentially being forgiven.

It is unclear as to whether the President has the authority to act in these items by executive order.

Read more at The Hill

Cuomo:  All Schools Can Reopen

The Governor announced Friday that all school districts in all regions will be allowed to open. The majority of districts in the State have submitted plans to the New York State Department of Health (DOH) and the New York State Education Department (SED); however, there are a number of school districts that have not submitted plans or submitted incomplete/deficient plans. For planning purposes, all school districts will be allowed to reopen on time. If numbers spike, or if there is a concern between now and opening day, the State can revisit this.

Schools will be required to post their remote learning plans, COVID-19 testing plans, and contact tracing plans on their websites. Additionally, all school districts will be required to schedule at least three listening sessions for parents, with notice, to explain the reopening plans and answer questions between now and August 21st. Additionally, the school district must host at least one separate discussion with teachers.

School districts will have the flexibility to adjust their reopening strategy and protocols based on their individual needs.

Read the press release

RBT CPAs: Salvaging Tax Benefits from New Net Operating Losses (NOL) Rules

Due to the COVID-19 pandemic, many small and mid-sized manufacturers expect to have significant net operating losses (NOLs) in 2020. What makes this prospect more discouraging is that some companies are still recovering from NOLs suffered in recent years.

The Coronavirus Aid, Relief and Economic Security (CARES) Act provides some relief. It has revamped the NOL rules, undoing some of the effects of the Tax Cuts and Jobs Act (TCJA) passed in 2017. This means your company may be in line for a refund if you amend previous tax returns. However, the CARES Act rules are complex. It’s essential to consult recently released IRS guidance that covers some of the mechanics of requesting a refund — and talk with your tax advisor — before filing an amended return.

Salvaging Tax Benefits from the NOL Rules – RBTCPAs

Steel Output Rises in US

The 1.33 million tons of US steel produced last week represented 59.3% of capacity, a marked improvement from the pandemic-related low of 51.1% in the week ended May 2. However, the latest measure from the American Iron and Steel Institute was down sharply from the year-earlier 79.3% figure.

Read the full story in Recycling Today

Covid-19 Could Push Some Universities Over the Brink

Covid-19 has put immense pressure on all universities. But the problems are about to get particularly severe for those in America, Australia, Canada and Britain that have come to rely on international students to fill their coffers. There are now more than 5m such students, up from 2m in 2000. 

The problem is that campuses make an excellent breeding ground for the virus, and students travelling across the world are a good way to spread it. A study by researchers at Cornell found that, although the average student at the university shares classes with just 4% of their peers, they share a class with someone who shares a class with 87%. The potential for the rapid spread of the disease was shown by the arrival of recruits at Fort Benning, an American army base. When 640 arrived in spring, just four tested positive. A few weeks later, more than a hundred did. According to the New York Times, some 6,600 covid-19 cases can be linked to American colleges.

Read more at The Economist

U.S. Employers Added 1.8 Million Jobs in July, Unemployment Rate Fell to 10.2%

Employers added 1.8 million jobs in July, and the unemployment rate fell to 10.2%, so far recovering less than half of the jobs lost due to the coronavirus pandemic.  July’s job growth followed May and June’s combined payroll gain of 7.5 million as many states lifted lockdown restrictions on businesses. There are now about 13 million fewer jobs than in February, the month before the coronavirus hit the U.S. economy.

Last month’s jobless rate showed Americans were returning to work. The Labor Department said job gains occurred in hospitality, government, retail, business services and health care.  Still, unemployment remains historically high. Before the coronavirus drove the U.S. into a deep recession this year, the unemployment rate was hovering around a 50-year low of 3.5%.

Read more at the WSJ

The Economist: Hard Questions as Scientists and Governments Seek Covid-19 Vaccines

Slowly but surely the economic costs of the covid-19 pandemic are becoming clear. On July 30th America’s statisticians revealed that the economy shrank by 9.5%, year on year, in the second quarter. 

A vaccine would help end the economic chaos. Scientists and pharmaceutical companies have stepped up to the task. More than 150 vaccines are being developed worldwide, with six in final, large-scale clinical trials.  The public-health and economic costs of the pandemic are such that, even as scientists beaver away, policymakers must grapple with two questions: how much to spend on vaccines, in order to ensure enough are made, and how to ensure they are distributed fairly.

Read more at The Economist

Travelers from New York Allowed into Trusted Traveler Programs Again

New Yorkers can once again register for Trusted Traveler Programs. However, registrants should note that, due to COVID-19, Trusted Traveler Enrollment Centers are closed until at least September 8, 2020.

In early February 2020, the Department of Homeland Security (DHS) prohibited New Yorkers from registering or re-registering for Trusted Traveler Programs, including Global Entry, SENTI, NEXUS, and FAST (Free and Secure Trade). In court, the government argued that New York’s Green Light Law prevented CBP from accessing records they needed to vet applicants for Trusted Traveler Programs. In April 2020, New York amended the Green Light Law to allow the DMV to share records “as necessary for an individual seeking acceptance into a trusted traveler program, or to facilitate vehicle imports and/or exports.” 

Read more at Jackson Lewis