On Saturday, August 8, President Trump signed an executive order and several memoranda to extend some relief programs while Congress continues to debate a robust relief package. The orders includes language to extend enhanced unemployment benefits, the deferment for federal student loans, student loan interest forgiveness, and eviction moratoriums.

The actions are likely to face legal challenges before they can be enacted, however, as they subvert the constitutional separation of powers that prevents the president from making any laws that control spending. That power is held only by Congress. Because of this, there is still time for a comprehensive relief package to be passed through the proper channels, and the executive order could be overturned either by congressional bill or a challenge in the Supreme Court.

The extended unemployment benefits are not a blanket renewal of the $600 FPUC program, but a reduction to $400, one-quarter of which is required to be paid by states. The extension is intended to be retroactive to August 1.

Deferments of student loans only apply to people with federal loans held by the Department of Education, and the deferral of payments is not required, meaning if you can continue to pay off your loans, you likely should, to keep lowering your loan obligation.

Freelancers should also pay close attention to the payroll tax deferral. The order would reduce a freelancer’s obligation by 50 percent from August 1 through the end of the year if your freelance income is less than $104,000. This means instead of paying 15.30% in Medicare and Social Security taxes, eligible freelancers will pay 7.65%.

This may feel like a tax cut for a short period of time because you won’t technically have to pay the full freight on your self-employment taxes, but it is important to note that right now it is only a tax deferral, meaning the taxes will still be due at a later date, unless, as the language in the actual executive order intimates, the Secretary of the Treasury decides to work to pass legislation (and is successful in doing so) that could eliminate the obligation to pay the deferred taxes. Both Republicans and Democrats have been resistant to the idea of a payroll tax cut during this crisis, so it's unclear whether such legislation would be successful.

Again, this order could also be challenged in court, so don’t plan on a payroll tax holiday just yet. It is critical to understand that you will still have to pay the tax at some point if the end result of the executive order is just a deferral. You would just be postponing payment and avoiding late payment penalties if you choose this option, when and if it becomes available.

Because of the uncertain nature of these orders and whether they will actually be enacted, we will update this article as the situation evolves and will provide additional information as needed.

Jonathan Medows is a New York City–based CPA who specializes in taxes and business issues for freelancers and self-employed individuals across the country. He provides tax, accounting and business articles for freelancers on his website, http://www.cpaforfreelancers.com — which also features a blog and a comprehensive freelance tax guide. Please note, due to the high volume of inquiries in regard to COVID-19, Jonathan is not able to respond to individual requests for information at this time.