Fourth stimulus check news summary: 22 May 2021
US stimulus checks live updates | Saturday 22 May 2021
Headlines:
- Leading Dems call for direct payments to be made permanent (full story)
- Expanded Child Tax Credit monthly payments will begin on 15 July, continuing for at least 6 months
- The IRS tax return deadline has now passed; however some states have issued extensions for their own tax day (read more)
- Over six million “plus-up” stimulus check payments have been sent out, a total of $13 billion
- US dollar bounces against European currencies after Federal Reserve reveals talk of tapering bond purchase
- Retail giants report positive economic outlook after stimulus check influx and reopening boost
- Benefits of delaying Child Tax Credit payments(full story)
- Latest batch of payments sees one million stimulus checks sent to recent tax filers
- California sends out $600/$1,200 stimulus checks as part of the Golden State Stimulus scheme
- You can track your third stimulus check by using the IRS' online Get My Payment portal
Take a look at some of our related articles:
Unemployment rates down significantly since April 2020
Based on data from the Bureau of Labor Statistics, the states whose unemployment rate has decreased the most since April 2020 are:
1. Nevada: 29.5 to 8% -- 21.5%
2. Michigan: 23.6 to 4.9% -- 18.7%
3. Hawaii: 21.9 to 8.5% -- 13.4%
4. New Hampshire -- 16 to 2.8% -- 13.2
5. Indiana: 16.9 to 3.9% -- 13%
Read our full coverage on how unemployment benefits are changing in June here.
How long do I have to my keep tax returns?
How long do I have to my keep tax returns?
Clutter seems an ever constant in our lives, perhaps you’ve got bitten by the Marie Kondo tidying up bug and you’re looking at those old tax filing documents. They most likely don’t “bring you joy” but you’ll need to hold on to them for a while at least.
Depending on what kind of papers you’re holding on to and what purpose they may serve in the future will determine whether it’s time for the shredder or they need a safe place for eternity. So what can stay and what can go?
$3000/$3600 Child Tax Credit: how and when will the payments be sent?
$3000/$3600 Child Tax Credit: how and when will the payments be sent?
Payments for the enhanced Child Tax Credit (CTC) are slated to begin 15 July, according to the Internal Revenue Service. Families can expect payments on the 15th of each month through December unless it happens to fall on a weekend or holiday. The remaining balance of the tax credit can be claimed next year during tax filing season.
Could these be negative impacts on the new income thresholds for single parents?
Read our full coverage to see what Representative Katie Porter has to say on the matter.
Representative Katie Porter of California has raised concerns that structure of the child tax credit, while an improvement on the old version, may penalize single parents. In a video posted on twitter, Rep. Porter highlights what she calls the “Single Parent Penalty,” and describes how children in single-parent households could receive less in benefits. If a parent or guardian files as “single” or “Head of Household” and are even a little bit over the income limit, their benefits will be cut. Rep. Porter argues that this makes a “child living in a single parent family, [...] less likely to get the tax credit.” The Congresswoman, who is a single parent herself, has put forth legislation to avoid this penalty for single family households.
IRS unemployment refund update: how to track and check its state
Still waiting for your tax refund from the IRS?Read our full coverage to learn how to track your payment.
Unemployment benefits: What changes are coming in June?
Unemployment benefits: What changes are coming in June?
Changes to unemployment benefits across the US could impact millions of beneficiaries as some states choose to end additional benefits or implement new requirements.
While twenty-two governors have announced that their state will end the payment of additional unemployment benefits in June and July, other states have opted for less severe changes. These include implementing work search requirements to encourage those on unemployment to begin planning their reentry into the workforce.
The US Department of Labor reported that for the week ending 15 May, initial unemployment claims dropped to their lowest level since the pandemic took hold of the US back in March 2020. However, early data may show that the national insured unemployment rate has remained steady at 2.7 percent. The twenty-two states that have called to end the additional payments have an average unemployment rate of 4.5%, almost one points lower than the national average. Those over the 5.4% average nationally include Mississippi, Alaska, Arizona, and Texas. However, sixteen of the states have seen minor increases in their unemployment rate since February 2021.
Tax Season 2021: Reasons why the IRS is delayed in sending out tax returns
The rasons why the IRS has delayed sending out tax returns
The tax filing in the United States has passed, and the IRS warns that receiving a return may take a little longer than usual this year.
Fourth stimulus checks: what do Republicans think of a new relief bill?
Republicans go cold on stimulus spending
President Biden is searching for a bipartisan solution to stimulus talks, but he may have to resort to reconciliation again if he is to pass a large-scale relief bill.
Unemployment benefits: will the $ 300 weekly payments continue?
Unemployment benefits: will the $ 300 weekly payments continue?
While the American Rescue Plan extends federal pandemic unemployment benefits until September, 22 states have now chosen to end them earlier.
Child Tax Credit 2021: what is the maximum age of the children to request the payment?
The American Rescue Plan passed in March will be sending more help to families with children in 2021 through an enhanced Child Tax Credit with optional monthly payments set to begin 15 July.
The tax credit was expanded both in size and age with parents of children who turn 17 in 2021 now eligible to receive up to $3,000. If your child has their 18th birthday before the end of the year you’ll need to settle for a smaller tax credit.
$10,200 exclusion: When will the IRS return the unemployment tax refunds?
The American Rescue Plan passed by Congress in March made changes to the way unemployment benefits can be taxed. The bill included the “exclusion of unemployment compensation of up to $10,200 for individuals for taxable year 2020” to help support families who have seen falls in their income over the last year.
The filing deadline for taxes in the United States has now passed and millions, especially those who are unemployed, are now awaiting their refund.
Stimulus mortgage program: how to apply to pause mortgage payments
In March 2020 former President Donald Trump passed the CARES Act, a $2.2 trillion financial relief package that aimed to provide federal support for those affected by the pandemic.
Included in the legislation was a new programme designed to help those struggling to make mortgage payments: forbearance. If you are temporarily unable to cover the cost of mortgage payments you can apply to pause or reduce your regular payments and face no additional financial penalties.
Forbearance does not completely erase your outstanding payments and you will still be expected to repay any payments that you miss, but it does offer much-needed respite during a tough time.
Turning a $1,200 stimulus check into a million-dollar business
Twenty-eight-year-old Ellie Diop took her $1,200 stimulus check from last year and used it to start her own business. Ellie Talks Money launched 10 months ago and is now a million-dollar business that coaches people on how to start their own businesses.
Lacking the resources to cover start-up costs, Diop spent a little over $300 to get started with buying a website domain and using equipment to post visually appealing photos. "I leveraged my experience in the corporate world to get started," she told Business Insider.
Unemployment benefits: will the $ 300 weekly payments continue?
Unemployment benefits: will the $ 300 weekly payments continue?
While the American Rescue Plan extends federal pandemic unemployment benefits until September, 22 states have now chosen to end them earlier.
Citing the need to get people back to work 22 Republican-led states have decided that enhanced unemployment benefits helping Americans who couldn’t work due to the pandemic are holding back the economic recovery. Although the financial assistance is slated to continue until the first week of September in the federal bill, some of those states have chosen to start ending benefits as soon as June.
Read our full coverage for details and information on the four states offering a return to work bonus.
US Labor Department reports on weekly unemployment claims.
Highlights
-"In the week ending May 15, the advance figure for seasonally adjusted initial claims was 444,000, a decrease of 34,000 from the previous week's revised level"
-"The highest insured unemployment rates in the week ending May 1 were in Nevada (6.1), Connecticut (4.6), Puerto Rico (4.6), Alaska (4.3), Rhode Island (4.3), Vermont (4.3), New York (4.1), Pennsylvania (4.0), the Virgin Islands (4.0), and Illinois (3.9)." Alaska is the only state on this list that will be ending the additional unemployment benefit payments next month.
Read the full memo here.
US Treasuring Department releases repot on how additional funding from the American Families Plan could help the agency go after tax evaders and other forms of financial fraud.
A press release put out by the Department described "the “tax gap”—the difference between taxes owed to the government and actually paid" which analysts have estimated to be around nearly $600 billion in 2019. Without action, those at the treasury believe that the gap could increase to "about $7 trillion over the course of the next decade if left unaddressed—roughly equal to 15% of taxes owed."
Read the full report here.
How much will children receive from the Child Tax Credit this summer?
When will the payments for the Child Tax Credit be sent?
This week the IRS announced that the first batch of payments will be sent on 15 July. Families can expect payments in the middle of each month through December.
Read our full coverage on the IRS announcement as well as information on why some families are choosing to opt-out of the payments.
Senator John Thune of South Dakota expressed his opposition to President Biden's American Families Plan on 17 May. The Senator voiced concerns over, tax hikes to pay for the proposal and addressed areas where the tax increases could effect middle class Americans; although he did not provide any specific figures.
Chuck Marr, Senior Director of Federal Tax Policy at the Center for Budget and Policy Priorities, released a blog titled "On Tax Day, 9 Charts on the System’s Inequities — and Plans to Address Them."
Marr highlights how changes to the Child Tax Credit passed under the American Rescue Plan will impact the vast majority of children. The blog also highlights "Biden Administration proposals to make the tax system fairer while generating revenues to finance critical investments for an equitable and robust recovery."
Fourth stimulus check: what have Democrats said about a new relief bill?
Fourth stimulus check: what have Democrats said about a new relief bill?
Democrats are pushing for the passage of two bills that would provide billions in stimulus for struggling families and to improve the nations infrastructure.
Many Democrats in Washington have taken note of the public favor-ability enjoyed by both the American Jobs Plan and the American Families Plan and are moving to pass two major pieces of legislation. Some leading Democrats are urging the Biden administration to include a fourth payment in the plan focused on families.
However, wide spread public support does not seem to shift the Republican position. The American Rescue Plan enjoyed high levels of public support -- around 75% -- did not receive a single Republican vote.
Read our full coverage for more details on the negotiations and on the prospects of a fourth direct payment.
On Monday, seven Democrats from the House Ways and Means Committee sent a letter to President Biden urging that he include additional direct payments in his American Families Plan.
How could another direct payment impact levels of poverty in the US?
The letter reads:
The American Rescue Plans' $1,400 checks alone will keep 11 million people out of poverty this year, with UI expansion and other provisions in the bill accounting for the another five million. A fourth and fifth check could keep an additional 12 million out of poverty. Combined with the effects of the ARP, direct payments could reduce the number in poverty in 2021 from 44 million to 16 million.
Read full letter here.
Retail News
What sector benefited the most from stimulus checks? Home improvement. Those who received direct payments spent on their homes than any other sector. Reports show that sales at one of the largest home improvement chains, Home Depot, saw sales increase more than 33% last year.
House Rep. Marie Newman announces that some Democrats have sent a letter to President Biden urging him to include "strong labor protections and wages with any green infrastructure or stimulus package."
IRS urges to file taxes to get refund or cut penalties and interest
The Internal Revenue Service has reminded taxpayers who missed the recent tax-filing deadline on 17 May and who are due a refund that there is no penalty for filing late. Those who owe and missed the deadline without requesting an extension should file quickly to limit penalties and interest.
Normally, the failure-to-file penalty is 5% of the tax owed for each month or part of a month that a tax return is late, up to five months, reduced by the failure to pay penalty amount for any month where both penalties apply. If a return is filed more than 60 days after the due date, the minimum penalty is either $435 or 100% of the unpaid tax, whichever is less. Filing and paying as much as possible is important because the late-filing penalty and late-payment penalty add up quickly. The failure to pay penalty rate is generally 0.5% of unpaid tax owed for each month or part of a month until the tax is fully paid or until 25% is reached.
California has recovered 48% of the jobs lost in March and April 2020
California has managed to regain 1.3 million jobs (48%) of the 2.7 million it lost in March and April of 2020 at the start of the Coronavirus pandemic. The state added more than 100,000 jobs for the third consecutive month, the Employment Development Department said on Friday.
Since February, California has created 390,300 jobs. More than 60% of the job gains in April came from hotels, restaurants and entertainment venues — businesses impacted the most by Gov. Gavin Newsom’s previous statewide stay-at-home order. California has waited longer than other states to ease restrictions on those businesses, with Newsom pledging to lift most of the rules on 15 June. Despite those job gains, California still has the second highest unemployment rate in the country at 8.3%, after Hawaii on 9%.
IRS correction “could result in a refund, a reduced balance due or no change to tax”
The American Rescue Plan, which included the tax exclusion on up to $10,200 of unemployment benefits received in 2020 per person, was passed in March with the 2021 tax filing season well underway. The IRS, to ease the burden on taxpayers and avoid people refiling, advised those who had reported unemployment compensation not to file an amended tax return, that the agency would review tax returns and correct for the new waiver. This process, the IRS said, “could result in a refund, a reduced balance due or no change to tax.”
How many Americans could receive an unemployment tax break this year?
Last week the Internal Revenue Service (IRS) announced that it would begin issuing refunds to eligible taxpayers who paid taxes on 2020 unemployment compensation. Over 10 million had filed a tax return before the American Rescue Plan was enacted providing unemployment tax break.
The IRS will send refunds to taxpayers who because of the new tax waiver on jobless aid overpaid their taxes this year. The agency is processing tax returns reporting unemployment benefits in two phases which will continue through the summer. It will start with the simplest to recalculate, individual taxpayers who did not claim children or any refundable tax credits. The second phase will be for tax returns from married couples filing jointly and more complex returns.
How much will children receive from the Child Tax Credit this summer?
Eighty-eight percent of children in the US can expect to receive benefits from the enhancements made to the Child Tax Credit (CTC), passed through the American Rescue Act (ARA). The US first introduced the CTC in 1997 as a part of the Taxpayer Relief Act. In its original iteration, the credit was worth $400 a year per child under seventeen.
Over the years the value of the credit has increased, first in 1999 to $500, and by 2020, the amount received by families had quadrupled to $2,000 per child. The ARA increased the value of the credit to $3,000 for children between the ages of six and seventeen, and $3,600 for those younger than six. The stimulus package also altered the way the credit can be distributed. Rather than being given out as a bulk some with one’s tax return, now families will have the option to receive monthly payments.
Mitch McConnell opposes stimulus spending
For the moment, Senate Minority Leader Mitch McConnell is the highest-ranking member of the Republican Party and his thoughts will hold huge sway over the GOP’s direction. He has been one of the most stringent critics of stimulus spending throughout the pandemic and appears intent on limiting the size of any new legislation.
Speaking to reporters in April, McConnell said: “I can’t imagine the economy is going to need a fourth round [of stimulus checks].”
President Biden 'optimistic' about bipartisan White House meetings
After announcing more details about both the American Jobs Plan and the American Families Plan, Biden has hosted a number of White House meetings looking to build a consensus behind his proposal. He has met with bipartisan groups and appears confident that a compromise can be found.
Fourth stimulus checks: what do Republicans think of a new relief bill?
In March President Joe Biden signed into law the American Rescue Plan, the first large-scale economic relief package of his presidency. The approval came after weeks of negotiations in the Capitol as Biden was forced to pass the legislation through the process of reconciliation.
The $1.9 trillion bill included a third round of stimulus checks, worth up to $1,400 per person, but faced universal opposition from the Republicans. Over the course of three votes in Congress, not a single GOP lawmaker voted in favour of the package.
With this in mind, how much support is Biden likely to get for the next stages of his Build Back Better agenda?
How much can I get from the new Child Tax Credit?
The new programme is set to begin from 15 July with monthly payments going to 39 million American families. The IRS estimate that 88% of children in the US will be covered by the new-look Child Tax Credits, but working out your entitlement can be a bit confusing.
Your Child Tax Credit payments will be based on your household income, personal situation and the number of child dependents claimed for on your latest tax return. To work out how much you will get, try out this Child Tax Credit online calculator...
Is there a fourth stimulus check coming in June? Relief bill updates
Although the IRS has confirmed that payments for the third round of stimulus checks will continue for the rest of 2021, there is a growing appetite, both in Congress and across the country, for another round of direct payments.
In recent weeks President Biden has largely refused to comment on speculation that a fourth stimulus check is in the offing, but reports suggest that his White House are looking into the possibility of introducing "automatics stabilizers" which would see stimulus checks automatically distributed if the economic recovery stagnates in the future.
Fourth stimulus checks: when will the next relief bill be discussed?
President Biden is holding White House meetings with bipartisan groups to discuss the next stage of his Build Back Better plan, but are stimulus checks on the agenda?
On 28 April President Biden announced details of his American Families Plan, the third part of his administration’s Build Back Better legislative agenda. A fourth stimulus check was not included at that time but there are reports that the President is now considering adding direct payments to the package.
It is thought that Biden will concentrate first on passing the American Jobs Plan, the infrastructure bill, but much of the public focus remains on the American Families Plan. A number of Democrats in Congress have publicly insisted that stimulus checks be included in the bill, but the White House is remaining tight-lipped for now.
Don't toss the IRS letter you got about your third stimulus check. Here's what to do with it:
If you got a third stimulus check, you should've also received a letter in the mail weeks later signed by President Joe Biden from the IRS. So far, the agency has disbursed 165 million stimulus checks either by direct deposit or through the mail. If you got a check but think it's the wrong amount (calculate your total here) or if you haven't got a payment yet, keep the letter because you might need it.
How to prepare for the Child Tax Credit payments
The reformed Child Tax Credit will be unlike anything offered to parents in the past, with monthly direct payments worth up to $300 per child. The IRS have confirmed that the payments will begin on 15 July but there is still some confusion about what the recipients need to do.
In general, the direct payments will be distributed automatically but some non-filers may need to provide additional information to the IRS. For all the details, check out this handy explainer...
New Child Tax Credit marks a significant change from previous support
In announcing the passing of his American Rescue Plan, President Biden spoke about the $1.9 trillion package as a new era of federal support for working Americans. Included in that bill was a complete overhaul of the existing Child Tax Credit programme, which had previously provided just a single annual tax credit rather than monthly direct payments.
In the past the credit was only partially refundable, meaning that low-income families could not receive the full amount.
Tax Season 2021: Reasons why the IRS is delayed in sending out tax returns
Waiting on your tax return?
Still waiting for your tax return? Read our full coverage to understand why the IRS is experiencing delays.
How to get your Child Tax Credit payment
The American Rescue Plan instigated a complete overhaul of the Child Tax Credit programme, which will see eligible parents receive the money as a direct payment, much like the stimulus checks. However although the majority of recipients should get the money automatically, some non-filers may be required to provide additional details to the IRS.
Check out this handy guide for all the information you need on the upcoming Child Tax Credit payments...
Aid for Black Farmers
Washington Post reports on Black farmers who will receive millions in federal aid. This move comes as historic exclusion of Black and minority farmers came under scrutiny, forcing the government to act. Full details here.
Retail Outlook
Since the beginning of the pandemic, 12,000 stores have closed. Additionally, major retailers including Best Buy and Macy's have closed locations and let go of workers as sales dropped dramatically. Market Watch reports that those stores who have been able to weather the economic crisis storm caused pandemic are posed to do very well in the future.
How long will the monthly Child Tax Credit last?
President Biden is attempting the extend the expanded Child Tax Credit through 2025, but many from within his own party want to make the monthly payments permanent.
Read our full coverage on the negotiation and proposal to extend the Child Tax Credit here.
Concerns over inflation are increasing in some economic circles.
Wall Street Journal reports on what has economist Lawerence Summer worried.
$10,200 exclusion: When will the IRS return the unemployment tax refunds?
The American Rescue Plan passed by Congress in March made changes to the way unemployment benefits can be taxed. The bill included the “exclusion of unemployment compensation of up to $10,200 for individuals for taxable year 2020” to help support families who have seen falls in their income over the last year.
Full details on when payments should arrive here
The American Rescue Plan passed by Congress in March made changes to the way unemployment benefits can be taxed. The bill included the “exclusion of unemployment compensation of up to $10,200 for individuals for taxable year 2020” to help support families who have seen falls in their income over the last year.
Full details on when payments should arrive here
Deep Dive: Morning Star looked at how Macy's is weathering the economic crisis caused by the pandemic.
Stimulus mortgage program: how to apply to pause mortgage payments
In March 2020 former President Donald Trump passed the CARES Act, a $2.2 trillion financial relief package that aimed to provide federal support for those affected by the pandemic.
Included in the legislation was a new programme designed to help those struggling to make mortgage payments: forbearance. If you are temporarily unable to cover the cost of mortgage payments you can apply to pause or reduce your regular payments and face no additional financial penalties.
Forbearance does not completely erase your outstanding payments and you will still be expected to repay any payments that you miss, but it does offer much-needed respite during a tough time.
Read our full coverage here
US stimulus checks live updates: welcome
Welcome to our live US stimulus checks blog for Saturday 22 May. We’ll be bringing you updates on a possible fourth direct payment and updates on the third stimulus check, which the IRS has been distributing since the $1.9tn American Rescue Plan was signed into law in early March.
We'll also provide information on other economic-aid schemes such as the expanded Child Tax Credit, which gives qualifying households up to $3,600 per child per year, and the Golden State Stimulus payments going out in California, where Governor Gavin Newsom has announced plans include more residents of the state in the program.