Fourth stimulus check news summary | 18 January 2022
- IRS boss Charles Rettig: Stimulus check and Child Tax Credit recipients should pay "extra attention" with their tax filing
- States agree to $1.85 Navient settlement to write off student debt for thousands of residents
- Will there be a fourth stimulus check for Social Security recipients?
- A backlog of six million tax returns could mean tax refund delays, says the IRS
- The Consumer Price Index grew 0.5 percent last month, securing a 7 percent increase across 2021
- Average monthly Social Security benefits increases to $1,657
- What is the payment schedule for SNAP food stamp benefits?
- Some states are considering introducing a fourth stimulus check
- California has distributed the final major round of Golden State stimulus checks
Useful information & links:
Tax Season 2021
- When will my employer send me a W-2 form?
- What benefits are availabletoparents and guardiansthis tax season?
- What are the dates to submit your tax return?
Child Tax Credit
- Can families expect to claim more from the Child Tax Credit when they file their taxes?
- No January Child Tax Credit payment after Congress failed to extend the programme last month
- Senator Manchin says he is yet to be convinced on President Biden's Build Back Better proposals.
- How many stimulus checks were approved during the last 12 months?
- What is the effect of stimulus checks on inflation?
- Will Social Security recipients get an additional $200this month?
- What does the 5.9% COLA increase mean for Social Security beneficiaries?
California launches program for students to earn $10K toward education
Students at 45 colleges and universities in California will be able to earn $10,000 toward their degrees by volunteering for the new Californians For All College Corps program. The first volunteer program of its kind in the country will be available to 6,500 students at a variety of schools, including University of California, California State University and California Community College campuses, as well as a handful of private schools.
Students who are selected to volunteer as College Corps fellows will work with organizations supporting K-12 education, climate action and food insecurity. Each participant will serve a total of 450 hours over a full academic year. The $10,000 which students will earn in return for volunteering is roughly equal to the amount a California student would receive in a Pell Grant.
Massachusetts families receive help to pay soaring energy bills
The Low Income Home Energy Assistance Program (LIHEAP) helps families cover a variety of energy costs including electricity, oil and natural gas bills. It provides federally funded assistance in managing costs associated with home energy bills, energy crises, weatherization and energy-related minor home repairs.
The reasons behind the US economy running hotter than normal are varied, but mainly it comes down to the disruptions caused by the covid-19 pandemic. The stimulus programs implemented during the pandemic which kept many households afloat played their part too, but not as much as critics are claiming.
The US Congress has approved almost $6 trillion to help the US economy and American households get through the pandemic. Of that amount, over $900 billion went to Americans as three separate Economic Impact Payments, or better known as stimulus checks.
The Supplemental Nutrition Assistance Program is designed to supplement the food budget of low-income families to ensure that they can afford to purchase healthy food and avoid periods of food instability.
The Food and Nutrition Service from the Department of Agriculture (USDA) outlines its central aim to improve “access to food, a healthful diet and nutrition education in a way that supports American agriculture and inspires public confidence.”
The Department of Agriculture (USDA) is offering a boosted food stamp payment for families in 2022, but not all states have opted to take advantage.
Officials looking for those who missed the advance Child Tax Credit payments
The majority of Americans are required to file a tax return, but not everyone is. Those who earn too little don't have to but the IRS always recommends to file a tax return as they might qualify for a tax refund. That is even more the case this year.
Since individuals earning less than $75,000, well above the non-filer threshold, could qualify for the full amount of the up to $3,600 tax credit officials in Philadelphia, and around the country, are trying to reach families that missed out on the advanced payments. They will be able to claim the credit as a lump sum on 2021 tax returns but they need to file.
Remainder of Child Tax Credit needs to be claimed on 2021 tax returns
Taxpayers can begin filing their 2021 tax returns with the IRS beginning next week. But this year could be more complex than prior years in part because of the advance Child Tax Credit payments. Families that didn't opt out of the one or all of the six monthly installments received only a portion of the credit.
The remainder will be collectable on tax returns, that amount will have to be reconciled with how much you received already. To aid taxpayers with that task the IRS began sending out Letter 6419 to recipients in December.
Child and Dependent Care Tax Credit could mean larger tax refund
The American Rescue Plan made changes to several tax provisions for the 2021 fiscal year that could translate into thousands of dollars for many American households. For families with children, besides the enahnced Child Tax Credit, the Child and Dependent Care Credit was given an upgrade.
Parents and those who have dependents could get reimbursed for their expenses to have their loved ones looked after while they go out to work look for work or study. Taxpayers who take advantage of the provision could get half of their expenses taken off their tax bill up to a limit, but you'll need receipts and some conditions apply to which expenses you can claim.
The maximum expenses that taxpayers can claim toward the credit was increased to $8,000 for households with one child or dependent and $16,000 for two or more. Also the credit was made refundable so it you owe less in taxes than the amount you can claim it will be tacked onto your tax refund.
Future of Pesident Biden's Build Back Better in limbo
The Democrats' sweeping social and climate policy bill has stalled in Congress over objections from Senator Joe Manchin. Without his vote the legislation can garner the 50 needed to pass the upper chamber.
One of his main sticky points is the enhanced Child Tax Credit which Democrats expanded last spring and began an advance payment scheme. The changes were temporary though and expired at the end of December. Manchin has called on his colleagues to fund the desired extension for 10 years and not just one as well as limiting eligibility.
Both options would be complicated. The former would limit other key policies in the Build Back Better Act because of the $1.8 trillion spending cap Manchin said he will accept. The latter would mean implementing a work requirement or lowering the income threshold to receive the credit which could leave out struggling families that the policy was intended to help.
Democrats are mooting other options that would increase the Child Tax Credit and keep the advance payment feature but would most likely result in a smaller increase to the $2,000 amount the credit has reverted to in 2022.
When the federal government issues you a student loan, it is often serviced by a private company. One of these companies, Navient, which formally was a unit under Sallie Mae,has reached a settlement with the attorney generals of several states after a lawsuit was filed against them for engaging in years of predatory practices.
Now more than 60,000 borrowers will have their student debt canceled in the coming months.
Warren pushes for Social Security benefits expansion
The Social Security Administration provides benefits for upwards of 70 million Americans, and Supplemental Security Income (SSI) is the most popular of those programmes. To help those who are relying on the support during the pandemic progressive Sen. Elizabeth Warren is encouraging Congress to pass legislation increasing the size of the SSI payments
36 million households go without Child Tax Credit payments
The expansion of the Child Tax Credit back in July was hailed as a transformative piece of legislation by Democrats in Congress, and across the six months of direct payments the poverty rate fell dramatically amongst recipients. However Congress was unable to agree to an extension beyond the initial six-month structure and millions of children are now at risk of slipping back into poverty.
Watch: Tax expert give tips ahead of filing season 2022
This year's tax season is expected to be a very busy one for the IRS with advanced Child Tax Credit and outstanding stimulus checks to be processed, along with the normal tax returns. To reduce your wait and make sure you don't make any mistakes, tax expert Nina Olson is taking part in a live stream.
The various forms of financial support offered during the pandemic have been linked to a marked increase in inflation in the US, and the Federal Reserve is considering raising the interest rate Jerome Powell, chair of the Federal Reserve, has told lawmakers that the central bank is becoming increasingly concerned with the high rate of inflation and warned that it may soon be forced to raise interest rates to combat it.
He said: “If we see inflation persisting at high levels longer than expected, if we have to raise interest rates more over time, we will.”
Ten million children could be in poverty if CTC is not extended
The Child Tax Credit expansion was only introduced last July but in its six-month lifespan it had already began to make a significant difference for the lives of recipients. Studies have suggested that poverty fell by around 40% amongst recipients last year, and there is growing concern that up to ten million children could be living in poverty if an extension to last year's boost cannot be agreed.
IRS letters are on their way
On Monday, 24 January the IRS will begin processing 2021 tax returns and is currently sending out some extra information that will help filers get an accurate tax refund. Here's what the agency says about that effort...
- Child Tax Credit payments Letter 6419: "This letter includes the total amount of advance child tax credit payments taxpayers received in 2021 and the number of qualifying children used to calculate the advance payments," the IRS said. You will need that information to reconcile the remaining credit you are due on your 2021 tax return.
- Stimulus check Letter 6475: "This letter will help Economic Impact Payment recipients determine if they are entitled to and should claim the recovery rebate credit on their 2021 tax returns when they file in 2022."
Stimulus checks were used to provide emergency support for vulnerable Americans during a time of economic uncertainty, and they proved fairly successful in shielding people from the financial impact. However with another major wave of covid-19 sweeping through the nation, the Senior Citizens League (TSCL) has called on Congress to send additional payments to Social Security recipients. TSCL Chairman Rick Delaney has called on lawmakers to pass an additional one-off $1,400 Social Security stimulus payment.
Stimulus checks provide personal savings boost
The three rouds of direct payments offered by the federal government during the course of the pandemic appear to have had a sizable impact on personal finances in the United States. Americans have collectively added an extra $3.5 trillion to their savings in the past two years compared to the projected levels from January 2020.
How to check your Social Security payments online
This month the Social Security Administration (SSA) introduced the cost-of-living adjustment (COLA) increase for 2022, giving recipients of the programme's benefits a 5.9% increase on their payments. But what does this mean for you? To check how much your Social Security payments have gone up, check out your my Social Security account and stay up to date with the latest...
Last year Gov. Gavin Newsom approved a legislative package known as the California Comeback Plan which provided a round of state-wide stimulus checks for roughly two-thirds of residents. The first payments went out in October last year and the distribution effort is nearly complete.
To be eligible for the payments California residents must have submitted their 2020 tax return no later than 15 October 2021. This was necessary for the California Franchise Tax Board (CFTB) to decide how much each individual’s entitlement was and to make sure that it goes to the correct bank account. However there are some exceptions who will have until mid-February to claim their payment...
IRS must contend with stimulus checks and Child Tax Credit this tax season
Filing time can always be a confusing and potentially stressful time but the addition of various pandemic-era financial support programmes has made it even more so over the last two years. This time around, the IRS will have to include the advanced payments of the Child Tax Credit in their process, and are already being swamped with a bombardment of calls and messages.
When does tax season 2022 start?
Millions will be wondering when to start filing their tax returns for 2021. The IRS is under huge pressure to get back on track after two pandemic-inrreupted filing seasons which has left the agency with a backlog of around six million unprocessed tax returns. THis year filing season starts on Monday, 24 January and you are advised to utilise the e-Filing online platform.
Sanders praises industrial action
Striking nurses in Buffalo won raises that moved all workers to at least $15 an hour and a reduction in staff shortages. These nurses fought not only for themselves, but their patients – and they won.
Kaiser Permanente healthcare workers won a major victory after rejecting a contract that would have given new workers lower wages and benefits.
Nabisco workers, struggling against forced overtime, inadequate wages and pensions, a two-tier health system and the outsourcing of jobs, went on strike and won. Once again we saw workers fighting not just for themselves, but for the next generation of workers.
More than 1,400 Kellogg’s workers in Michigan, Tennessee, Pennsylvania and Nebraska went on strike for months and won, fighting back against a plan to give new workers lower wages and benefits.
Starbucks employees in upstate New York, for the very first time, organized a union shop in a fight against a giant corporation that did just about everything it could to stop them.
Those are just some of the inspiring efforts that took place last year. Let me tell you about what’s happening right now as workers continue to stand up to some of the most powerful corporate interests in the country.
Will the Child Tax Credit be expanded again?
President Bidne had hoped to include a one-year extension of the advanced Child Tax Credit in his Build Back Better bill, but after failing to garner sufficient support in Congress the President was forced to shelve those ambitions before Christmas. However there is still a clear appetite amongst those within his party to bring back the monthly payments, and he will be eager to pass more legislation ahead of the mid-terms later this year.
Around 36 million households benefited from the program in 2021 which reached approximately 90 percent of intended recipients. Its estimated that the changes to the Child Tax Credit cut childhood poverty by 40 percent last year.
IRS to contact stimulus check and Child Tax Credit recipients
If you received the $1,400 stimulus check or advance payments of the Child Tax Credit last year, the IRS will be sending you a letter or two. You'll want to hang on to any correspondence from the tax agency so that you can correctly fill out your 2021 tax return.
The letters will inform taxpayers how much they received from each of the programs so that they can reconcile that amount with how much they can still claim. If you received less than the full $1,400 amount for the third stimulus payment and your income decreased in 2021 from 2020 you may be able to get more through the Recovery Rebate Credit.
Welcome to AS USA
Good morning and welcome to AS USA, we will be bringing you all the latest updates on the Child Tax Credit, Social Security boost and the upcoming tax season 2022. Here's everything you need to know on Tuesday, 18 January...