Fourth stimulus check and child tax credit news summary: 5 July 2021
US stimulus checks and Child Tax Credit news | 5 July 2021
-Three more states to cancel the payment of federal pandemic unemployment benefits this month. (Full story)
- Some individuals with annual earnings of more than $200,000 have received a stimulus check, the IRS confirms (full story)
-Healthcare is now available to those unemployed because of the pandemic. Those interested have until 15 August to take advantage of the benefit. (More details)
- US unemployment rate rose slightly to 5.9% in June, despite adding 850,000 jobs. What drove the increase, will federal benefits be extended, and how does the news impact the chance of a fourth stimulus check.
Useful information / links
- The next deadline to opt out of Child Tax Credit monthly payments is Monday 2 August (find out more)
- Some households may need to file taxes or use the Child Tax Credit Non-filer Sign-up Tool to get payments
- Should you update your tax return information? Find out when to contact the IRS
Take a look at some of our related news articles:
The mixed unemployment figures released by the US Labor Department recently may strengthen calls for a fourth stimulus check.
So far during the coronavirus pandemic, three federal stimulus checks have been approved by Congress and sent out by the IRS to eligible Americans.
Florida Freedom Week Tax Holiday 2021: How long does it last and what will be discounted?
The first tax holiday which lasted from 28 May through 6 June was focused on disaster preparedness for the upcoming hurricane season. The second, which allows residents to purchase outdoor recreational equipment and event tickets at a discounted rate will run through 7 July.
Read our full coverage for details on what is included during the remaining days of the tax holiday.
NBC News reports on how some Democratic strategists believe passing a sweeping infrastructure package could help hold the majority Dems have in the House in 2022.
For representatives in swing districts, the passage of a bipartisan infrastructure bill could help them secure a victory after winning by razor-thin margins in 2020. Rep. Susan Wild who won her seat by less than 15,000 votes told NBC that “I don’t mean to sound too quaint about this but I honestly believe the way I navigate my race is by producing results,” later going on to say that those results include "infrastructure projects.”
Are other states thinking of approving their own stimulus checks like California?
On Monday the California legislature approved the latest stimulus bill from Gov. Gavin Newsom, entitled the California Comeback Plan. The package is a result of the state’s record-breaking tax surplus and expands the programmes included in the Golden State Stimulus bill.
California has been the most proactive when it comes to doling out financial support to residents and businesses, with $600 stimulus checks going out to an estimated two-thirds of Californians.
However, it is not the only state or local authority to do so.
Read our full coverage for details on other states to have passed their own stimulus legislation.
Does the public support the American Jobs Plan?
As negotiations over the bipartisan infrastructure plan continue, some are left wondering, did the public not support the measures included in the American Jobs Plan?
In late June, Data for Progress released a poll that showed 57% of voters supported the plan with no additional information. When provided more details on what the plan includes, the number jumped to 65%.
So, why are a group of Senators working to pass a much smaller package?
The Republican caucus and some more conservative Democrats oppose President Biden's American Jobs Plan because it would increase the corporate tax rate. One of the Trump administration's crowing achievements in the eyes of the GOP is the corporate tax rate was brought down to the lowest levels seen in decades.
However, increasing the corporate tax rate is popular among the general public. An earlier survey had found that the majority of respondents said they were in favor of an increase in the corporate tax rate to pay for the benefits included in both the American Jobs Plan and the American Families Plan.
Georgia becomes the latest state to bring back work search requirements for those claiming unemployment benefits to receive them.
Read our full coverage for information on what other states have or plan to reinstate this requirement.
Pennsylvania's unemployment insurance system failed over the weekend, and on Monday posted on social media saying that those trying to use the platform should try again alter.
Users who tried to log on to the platform early Sunday were unable to, with no notice from the agency tasked with overseeing the platform, people became frustrated. Reporter Angie Moreschi wrote of one claimant who tried to contact the agency because he is owed over six weeks' worth of benefits, around $5000 but has not able to get through to anyone.
The system that failed is new and launched just last month. However, some users believe it is riddled with more issues than the previous version.
Gov. Asa Hutchinson of Arkansas throws his support behind the bipartisan infrastructure bill on CNN's State of the Union. As Republican support for the package dissipates on Capitol Hill, Gov. Hutchinson, who is a Republican himself, came at the right time for those pushing the bill forward.
In an effort to continue the economic reopening of the country, President Biden had announced that he would work to get at least 70% of adults partially vaccinated by the Fourth of July. The economic recovery of the country depends on vaccination. With more people vaccinated, cities and towns can return to some semblance of normal life. As businesses open and hire more staff, there have and will continue to be positive benefits throughout the economy.
The goal was not met and as the delta variant begins to infect more people, some are concerned how areas with low vaccination rates will fair economically. Nineteen states did make the target and on 4 July, 67% of adults had received at least one dose of a covid-19 vaccine.
One tool lawmakers had tried to use to encourage residents to get their shots was the launch of vaccine lottery programs. However, a look at preliminary data shows that these programs may not have had a meaningful effect on vaccine uptake. As lawmakers scramble to get more people vaccinated, these programs and others should be evaluated.
In late June, the Bureau of Economic Analysis released data showing consumer spending continued to drop from its high in March. After the third round of stimulus checks was sent, consumer spending increased 30%. Compared to its April levels, consumer spending declined 2%.
Also in May, disposable income which the BEA defines as "the income available to persons for spending or saving," dropped even further from its March high. In February, before the third stimulus check was sent, disposable income stood at $17.8 billion rising to more than $22 billion. In April, the rate fell to $18.85, and in May dropped even lower to $18.49 billion.
Center on Budget and Policy Priorities shows how some aspects of the American Families Plan could cut child poverty in half and reduce gaps between ethnic groups by 2022.
Are any states considering lowering their corporate tax rate?
The Tax Foundation published a blog on 1 July, outlining why the state of Michigan is considering lowering their corporate tax rate.
According to the organization, some state lawmakers are interested in making the move "to alleviate the tax burden on businesses still emerging from the pandemic and to make the state more competitive." A bill is circulating in the Michigan Senate to lower the rate "from 6 percent to 5.5 in tax year 2021, and then lower it again to 4.9 percent for tax year 2022."
Should the state choose to enact this change, they are far from the only state. This year, five states, Idaho, Louisiana, Nebraska, New Hampshire, and Oklahoma have enacted legislation to lower the corporate tax rate.
Which US states don't have an income tax?
In the US, each state has the power to determine how it will generate revenue through taxation. Some states opt to forgo the collection of income or sales tax. The elimination of income tax at the state level, motivates some to move. However, governments must collect revenue one way or another, and if is not through income taxes, it may be through higher sales or property tax.
There are a total of nine states that do not tax income at the state level, Alaska , Florida , Nevada , New Hampshire , South Dakota , Tennessee , Texas, Washington, and Wyoming.
According to the US Census Bureau, in 2019, the percent of revenue coming from the federal government was three percent larger on average in states with no income tax. For states with no income tax, the average was 29% while for those with income tax the average stood at 26%.
Read our full coverage for more information and to see how spending on key government programs varies in states that do and not require income tax.
Experts hoping for swift distribution of Child Tax Credit payments
The IRS has had its work cut out since the start of the pandemic, tasked with overseeing new programmes like the three rounds of stimulus checks as well as adminstrating two busy tax seasons. However after that experience there is hope that the distribution of the Child Tax Credit monthly payments should be fairly smooth.
It is certainly true that the efficiency of the third round of stimulus checks was much better than that of the round round, which was sent out nearly a year previous. The IRS has even introduced two new online portals to help recipients control and track the whole process.
Last week lawmakers in California passed a bill that would allow for sending the second round of Golden State stimulus checks with an expanded income threshold. The first round of $600 checks was sent to residents making under $30,000 a year and the new bill will expand that to include those making under $75,000 a year.
The checks will be sent based on the information provided this year during tax filing season. For those who have not yet filed their taxes, the state recommends sending in a return to ensure eligible individuals receive their payments.
Only half of recipients are aware of the new Child Tax Credit
Despite the efforts of the White House to spread the word about the new-look Child Tax Credit it appears that many people are still in the dark about the programme. A recent study from Data For Progress found that just 53% of recipients are aware of the upcoming monthly payments.
This could be a major issue for some low-income families who will be required to use the Non-filers Tool to submit their personal information to the IRS to trigger the payments. If this group are not informed of the upcoming monthly payments, which could total up to $3,600 per child over the course of the year, some of the most vulnerable children could be excluded.
Are you still waiting for your tax refund or a missing stimulus check payment? You may be one of the millions of Americans to fall foul of the IRS' huge workload over the last 16 months that has led to some big delays.
At last count the IRS had a backlog of 35 million tax returns that are still yet to be processed. This has a knock-on effect for the tax authority's other responsibilities, such as the distribution of the stimulus check. For more information on the delays and a guide on how to use the IRS' Where's my payment? online tool....
How is getting the California stimulus check?
After announcing a $75 billion budget surplus for 2020 California Gov. Gavin Newsom pledged to put that money towards the state's covid-19 recovery. Earlier this year he passed the Golden State Stimulus bill, a fairly compact relief package that provided stimulus checks for residents earning less than $30,000.
However Newsom has now expanded on that with the California Comeback Plan, a new relief bill that broadens the eligibility requirements for the direct payments considerably. Under the new rules, roughly two-thirds of Californians will be able to get the $600 payment.
Reminder of the upcoming Child Tax Credit payments
If you're still not sure about what the new Child Tax Credit will mean for you, the IRS has produced this handy video outlining how the programme will work and who is eligible to receive the monthly payments.
Rep. Rosa DeLauro, who has been a proponent of this expanded Child Tax Credit for decades, said of the new system: “This is a lifeline to the middle class, it puts money in families’ pockets and it cuts all child poverty in half. It provides children and their families with additional payments throughout the year that help them with the cost of food, child care, diapers, health care, clothing and taxes,”
With the White House apparently unwilling to push for a fourth stimulus check at the moment, leaving some to look to their state for the direct relief that they need. Earlier this year, a handful of states passed their own stimulus packages while Congress spent months debating President Biden's American Rescue Plan.
For some people the most likely source of another stimulus check may be from their local government, but how many states have actually passed their own stimulus legislation?
Biden remains intent on extending the Child Tax Credit monthly payments
The new Child Tax Credit has been hailed as a once-in-a-generation change to the way that families are supported by the government, but as it stands the new system is only set to last for one year. However President Biden has included a provision in his American Families Plan to extend the programme through 2026, with a number of Democrats in Congress calling for it to be made permanent.
The White House aide confirmed that Biden was happy to pass the legislation without GOP approval, saying: "The president knows the child tax credit would be a game changer for millions of families and would welcome bipartisan support for it but there is not a round of talks happening with Congress about a second bipartisan package."
The IRS is continuing to send out payments as part of the third round of stimulus checks, and we are now beginning to see how that process has gone so far. In total, the tax authority have distributed 163.5 million payments at a total cost to the federal government of $389.9 billion.
But the new figures also show that a substantial amount of money has gone to those who most would consider 'high-earners', some of whom have annual earnings in excess of $200,000. How did this happen and will they be required to pay back any of their stimulus check entitlement?
How to use the new Child Tax Credit online tools from the IRS
At the start of July the IRS introduced two new online portals that will allow families to control the upcoming Child Tax Credit monthly payments. The two tools will allow recipients to do everything from updating their personal details to opting out of the monthly payments entirely. Here's everything you need to know about the new enhanced credit...
When will your tax refund arrive?
The IRS has been working non-stop since the start of the pandemic to oversee a range of federally-funded relief programmes like the stimulus checks and the upcoming Child Tax Credit payments. However after such a chaotic year there have been some issues and the tax authority is now working through a backlog of 35 million unprocessed tax filings.
This has had a knock-on effect for those awaiting a tax refund, with millions of people expecting to get a refund for taxes paid on unemployment benefits for 2020.
Is it a good idea to keep the Child Tax Credit as monthly payments? When the new system goes into affect from 15 July the IRS will automatically send all eligible families a payment worth up to $300 per child, but there is another option.
Some families are choosing to opt out of the monthly payments to get their money as a single end-of-year tax credit. This lump sum will be worth up to $3,600 per child and could be used to knock a substantial amount of their tax bill, and avoids the risk of having to pay back the monthly payments if your income increases.
Scammers are out to steal your stimulus check payments
More than 163 million payments have now been distributed as part of the third round of stimulus checks, but the IRS is continuing to send millions of outstanding payments every week. If you are still waiting for your, or feel like you may be due a supplementary 'plus-up' payment then you should check out this guide to avoid been scammed out of your money.
Throughout the pandemic unscruplous thieves have been targetting the various government programmes introduced to provide support for struggling Americans. Here's everything you need to know...
Do you know how much you will get from the new Child Tax Credit?
The White House appears incredibly optimistic about the potential of the overhauled Child Tax Credit to help working families across the United States. Their own fact sheet claims that the programme could halve the number of children in poverty over the next 12 months, but there is concern that not everyone is aware that the support is coming.
This is a particular problem for the households who not not receive the monthly payments automatically. If you do not typically file a tax return you may need to provide your details to the IRS to trigger the payments. For more information, check out our guide - Child Tax Credit: how and when to sign up
On 2 July, the Bureau of Labor Statistics has released information showing that the June unemployment rate held steady at 5.9%.
The American Rescue Plan included a measure that would allow for the sending of federal pandemic-related unemployment benefits through 6 September 2021. After a lackluster jobs report for April, moderate job growth in May, and a plateau in the unemployment rate in June, some look to the September deadline and wonder if it should be moved back. While the slow job growth could be caused by the economy’s inability to absorb all workers who lost their jobs throughout the pandemic, there are a few other reasons as well.
The first is that the labor market is hot, meaning that if you are looking for a job, the market is working in your favor. Many businesses and organizations impacted by the pandemic opted to let go of their employees to reduce costs and weather the storm. With so many businesses hiring, these individuals are now free agents in the market and can be more selective when picking their next job.
How to request your Golden State Stimulus check
On 28 June, the California legislature approved a proposal to send a second round of Golden State Stimulus checks to most Californian residents.
(Image: Mike Blake/Reuters)
Millions are still waiting for their tax refund as the IRS deals with one of the busiest tax seasons in recent years. How long should it take to get yours?
Florida Freedom Week Tax Holiday: the lowdown
During Florida's Freedom Week Tax Holiday, residents of the state can purchase event tickets and recreational equipment at discounted rates.
(Image: ALEX FILIPE / REUTERS)
Stimulus checks: every AS English article
You’ll find a wide range of news articles offering updates on a possible fourth stimulus check, as well as info on the third round of direct payments, in our dedicated stimulus checks section.
A guide to the Child Tax Credit Eligibility Assistant
With monthly payments of the new, expanded Child Tax Credit beginning on 15 July, the IRS has released two new tools, including the eligibility assistant, to manage installments.
(Photo: DON MACKINNON / AFP)
"Let's go! Let's get this done"
CNN spoke to Democratic congresswoman Rosa DeLauro, who first proposed the expansion of the Child Tax Credit back in 2003 and, having pushed for the measure ever since, finally saw her patience rewarded when it was included in President Biden’s $1.9tn American Rescue Plan earlier this year.
“Every year [after first tabling the CTC expansion, I was] just introducing it and re-introducing it,” DeLauro said, adding that as the American Rescue Plan was being drawn up, she again pushed hard for a bigger credit.
“I said, ‘Enough!’ […]”, DeLauro explained. “‘This is it, it’s now. It’s now our watch. Let’s go! Let’s get this done.’ And they came back within 24 to 48 hours and they said. ‘It’s in.’”
The American Rescue Plan included a new program which will make many Obamacare healthcare policies free for those who receive unemployment benefits in 2021.
The latest Labor Department jobs report found that the number of people out of work had grown during June, despite there now being more available jobs across the country.
The Labor Department recently released the latest employment data for June. While 850,000 jobs were added in the US, the country's unemployment rate increased slightly, to 5.9%.
The mixed results may strengthen calls for a fourth stimulus check to aid the recovery.
Who will get Child Tax Credit monthly payments?
Ahead of the scheme's roll-out on 15 July, the IRS has put together this video explainer on the monthly Child Tax Credit payments of up to $300 per child:
A new report from the IRS has also shown how the payments have been distributed, with a surprising amount going to households that most would consider ‘high-earners’.
Petition calling for monthly stimulus checks closes in on 2.5m signatures
Nearly 2.5 million people have now signed a Change.org petition urging Congress to approve recurring stimulus checks until the coronavirus pandemic is over.
The creator of the petition, Denver restaurant owner Stephanie Bonin, is calling for $2,000 checks for adults and $1,000 payments for children every month.
"Supplying Americans with monthly support until they can get back on their feet can save our communities from financial ruin," Bonin says. "We need immediate checks and recurring payments so that we can keep our heads above water."
At the time of writing, 2,496,202 signatories had put their name to the petition. You can sign it here.
We look at the three stimulus checks sent out so far by the US federal government since the outbreak of the covid-19 pandemic.
Avoid falling for Child Tax Credit scams
The IRS is warning American households to be vigilant for scammers' attempts to steal their personal information as the tax agency prepares to roll out the new Child Tax Credit scheme.
This awareness-raising video outlines the dangers:
Child Tax Credit questions and answers
In addition to launching a range of online portals to help American households claim the expanded Child Tax Credit, the IRS has also created a useful FAQs page on the new scheme.
You’ll find questions and answers on a number of topics relating to the CTC, including eligibility, calculating your credit and unenrolling from monthly payments.
We take a look at when eligible Californians can expect to receive the $600 stimulus check recently approved by the state's legislature.
The California legislature has approved a $600 stimulus check for all those in the state with an income of $75,000 a year or less. Those who received a check during the first round are ineligible to receive another.
Additionally, two groups, adults with dependents and undocumented families, will be able to claim one additional $500 check.
Child Tax Credit: useful online IRS tools
The IRS has created a series of online tools for claimants of the new, expanded Child Tax Credit.
The Child Tax Credit Update Portal allows households to check whether they’re signed up to monthly payments of up to $300 per child, unenroll from monthly payments, and provide and update bank details.
Meanwhile, the Advance Child Tax Credit Eligibility Assistant enables families to check whether they qualify for monthly payments.
The IRS has also established the Child Tax Credit Non-filer Sign-up Tool, which allows Americans who do not file a tax return to register for the CTC.
From Thursday 15 July, the IRS will begin automatically distributing monthly payments worth up to $300 per child to tens of millions of families across the United States.
The payments are part of the reformed Child Tax Credit, included in the recent American Rescue Plan stimulus package. The White House anticipates that the new CTC could halve the number of children in poverty over the next 12 months.
Although the monthly payments are the default method, parents do have a choice in how they receive the money.
Stimulus check live updates: welcome
Hello and welcome to our daily live blog for today, Monday 5 July 2021, bringing you updates on a possible fourth stimulus check in the US.
We'll also provide you with information on the third round of stimulus checks, which began going out in March as part of President Biden's American Rescue Plan, in addition to news and info on other economic-support programs such as the new, expanded Child Tax Credit.