Financial aid | News summary for 22 February
US financial aid news: latest updates
- Sen. Romney pushing for Republican-friendly child tax credit extension
- Child Nutrition Programs feed more than 20 million children a day in the US through school lunch programs
- IRS releases guidance on how to report income from cryptocurrency when filing your taxes
- Credit card debt rose by $52 billion during Q4 2021 according to New Fed report, the fastest growth rate in 22 years
- Economic inflation begins to impact housing market
- IRS is forced to suspend the distribution of tax letters while it concentrates onhuge returns backlog
- How a Russian invasion of Ukraine would affect the stock market
- More than 600,000 families have benefitted from the US Treasury Department's Emergency Rental Assistance Program - Who is eligible?
Helpful news and links
- Can I use a pet to claim any tax credits?
- Americans can claim additional financial assistance through the Low Income Home Energy Assistance Program
Retirement and Social Security
- Tax agency announces increase for 401(k) retirement account recipients for 2022
- How to book an appointment with the Social Security Administration
SNAP and WIC
- Will Amazon accept WIC on orders?
- Can I use SNAP benefits to pay for meal delivery kits?
Read related articles:
IRS facial recogntion to continue
Two weeks after dropping a controversial facial recognition plan, the IRS has given new details about how it plans to replace the system. In a statement on Monday, the agency confirmed that all users of the IRS.gov website will be able to opt out of biometric data collection, offering video interviews as an alternative for this year’s filers and promising a shift to the government-run authentication system Login.gov service in the future.
“[A] new option in the agency’s authentication system is now available for taxpayers to sign up for IRS online accounts without the use of any biometric data, including facial recognition,” the statement said.
“This is consistent with the IRS’s commitment earlier this month to transition away from the requirement for taxpayers creating an IRS online account to provide a selfie to a third-party service to help authenticate their identity.”
Building back better on climate change
The Build Back Better plan includes so many interlinked aspects related to how the US distributes its financial packages. Democratic congressman for Silicon Valley, Ro Khann, represents a district home to tech industry titans and Anne McElvoy asked him how their power can be checked.
Can Capitol Hill regulate online hate speech without impinging on free speech? Plus, how does the deputy whip of the Congressional Progressive Caucus see his wing’s relationship with the rest of the party?
US an 'outlier' in fighting child poverty
If you've been following our daily blog on financial aid in the US then you'll be across the issues that have been caused by mainly Republican lawmakers not agreeing to the extension of the enhanced Child Tax Credit.
It was heralded as a game changer for America's social safety net. It dramatically reduced child poverty. But, last month, the enhanced Child Tax Credit — a kind of "Social Security for kids" — expired, and millions of American children sank back into poverty.
In a new paper, the economists Anna Aizer, Hilary W. Hoynes and Adriana Lleras-Muney explore the reasons why the United States is such an outlier when it comes to fighting child poverty. While they acknowledge the reasons are varied and complex, they focus their analysis on one factor: American policymakers, influenced by economists, have dwelled much more on the costs of social programs than their benefits.
Greg Rosalsky reports for NPR.
Child Tax Credit: all at your fingertips
As you'll more than likely be aware, the American Rescue Plan increased the Child Tax Credit from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six, and raised the age limit from 16 to 17
All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household).
The White House website provides all the details specific to your situation on their dedicated Child Tax Credit website - in English and Spanish.
The new child tax credit enacted in the American Rescue Plan is only for 2021.
That is why President Biden strongly believes that we should extend the new child tax credit for years and years to come. That’s what he proposes in his Build Back Better agenda.
Higher wages for workers are not the main source of high inflation
Inflation is running at a clip not seen in 40 years and companies are pointing the finger at paying higher wages for why prices are increasing. Economic data however points the finger in another direction, the cost of goods due to shortages and companies padding their profit margin.
The price of goods is increasing by a factor of three compared to services. Inflation has been higher in industries that are less labor intensive. The main driver of inflation has been higher supply chain costs which companies are passing onto consumers while profits are higher than before the pandemic.
It was reported in January that the Biden administration was preparing an executive order to study cryptocurrencies with the aim of developing a government-wide framework to regulate digital assets. The executive order would also mandate government agencies investigate the possibility of launching a central bank digital currency (CBDC) issued by the US Federal Reserve.
The move comes as it is unlikely that Congress will put in place any legislation to standardize rules for crypto. The directive will not involve any immediate direct action but will task agencies to report back after they have investigated risks associated with crypto assets including their financial stability and impact on the environment.
The taxman cometh for crypto investors
Trading in cryptocurrencies and NFTs has taken off during the pandemic with the market crossing the $1 trillion mark in 2021. What many taking part in purchasing the crypto assets might not know is that they are required to report transactions in those assets to the Internal Revenue Service.
Last year the agency launched an enforcement initiative for tax violations related to cryptocurrency called Operation Hidden Treasure.
Fallout from sanctions on Russia will hit US and allies unequally
The US and its allies have begun imposing sanctions on Russia for its decision to send troops into the eastern portions of Ukraine controlled by separatists. Although limited in scope for now in the hope that Russia will not follow through with a wider invasion of its neighbor further sanctions are being contemplated.
The financial pain of the sanctions will not just be felt by Russia but also the US and European Union countries. However, the economies of the latter are much more intertwined with Russia. The effect on energy imports will be especially significant for European countries, which rely on Russia for around 35 percent of their natural gas.
Wall Street down as threat of full Russian invasion of Ukraine grows
All three Wall Street indexes were down at the close of trading on Tuesday as fears over escalating Russian incursion into Ukraine. Russian troops have already been spotted in the separatist controlled areas in Eastern Ukraine.
The Russia-Ukraine crisis has been pushing up energy prices over the last few weeks. Germany withdrew certification of the Nord Stream 2 gas pipeline from Russia after President Putin recognized the Ukrainian regions of Donetsk and Luhansk as independent states. Crude oil nearly surpassed the $100 mark before dropping back to just under $97.
Ukraine tensions, Home Depot drag Wall Street lower
Wall Street's main indexes slumped on Tuesday as the prospect of harsh Western sanctions against Russia over its conflict with Ukraine kept investors on edge, while a near 9% drop in Home Depot also weighed.
Six of the 11 major S&P 500 sectors declined, with consumer discretionary stocks leading the way with a 2.8% fall.
Global stocks took a beating after Russian President Vladimir Putin recognized two breakaway regions in eastern Ukraine and ordered troops to those regions, inviting fresh Western sanctions.
Markets now await Joe Biden's remarks on the issue at 1 p.m. ET with Washington as well as the European Commission expected to announce potentially severe new sanctions on Russia on Tuesday.
Earlier in the day, Germany halted the Nord Stream 2 gas pipeline project designed to bring Russian gas to the country and Britain slapped sanctions on five Russian banks and three men close to Putin.
"We have the interest rate environment and (uncertainty about) what exactly the Federal Reserve is going to do..., coupled with a great uncertainty as to the ability of the United States to actually address the Russian-Ukrainian situation, (they) magnify the volatility factor," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
"A high level of uncertainty creates fear and fear manifests into defensive behavior. And the defensive behavior translates into some asset and sector rotation from a risky profile to a less risky profiles. So, I believe that the downside is to be favored right now."
At 12:06 p.m. ET, the Dow Jones Industrial Average was down 269.71 points, or 0.79%, at 33,809.47, the S&P 500 was down 23.88 points, or 0.55%, at 4,324.99, and the Nasdaq Composite was down 125.33 points, or 0.93%, at 13,422.73.
Home Depot Inc slid 8.9% after the home improvement chain reported a decline in gross profit margins for the holiday quarter due to a jump in transportation and labor costs. Its stock was the biggest drag on the Dow.
This year after cryptocurrency markets exploded in popularity after record setting gains in value (which have since decreased) many will need to report their gains to the Internal Revenue Service (IRS).
Since 2014, the IRS has had rules on the books on how tax payers report income from "virtual currency" defined as "a digital representation of value, other than a representation of the U.S. dollar or a foreign currency (“real currency”), that functions as a unit of account, a store of value, and a medium of exchange."
File electronically and get refund by direct deposit, IRS urges taxpayers
This season, the IRS is urging US taxpayers to avoid delays by filing electronically and getting their refund by direct deposit.
This comes after the agency experienced a major backlog in processing tax returns last year, in part because it had to deal with large numbers of paper returns that had to be processed by hand.
Most filers in the US have until 18 April to submit their 2021 tax return.
The Child Nutrition Program administered by the US Department of Agriculture provides free or reduced meal programs at schools across the country.
The US federal government has sent out three stimulus checks to qualifying Americans since the beginning of the covid-19 pandemic.
No child tax credit, a return to poverty for millions
Child poverty spikes 41% in January - that's 3.7 million more kids back into poverty after the expanded child tax credit was ended.
Hallie Jackson looks into how this is affecting real Americans, and what lawmakers can do.
Escalating Russia-Ukraine crisis ripples through financial markets
Stock markets tumbled this morning while bonds and commodities rallied after Russian President Vladimir Putin ordered troops into the breakaway regions of eastern Ukraine.
Elsa Lignos, Global Head of FX Strategy at RBC Capital Markets, responded.
"The short-term market reaction will depend on the extent of sanctions imposed by the West. Western leaders have two options – a 'modest' approach, trying to signal de-escalation (what markets 'want' to see) or a firmer approach, recognising that allowing Putin to dismantle Ukraine piece by piece will still achieve his end goal, over a longer timeframe.
"EU ambassadors are meeting today to discuss their plan for sanctions...The U.S. response is probably more important. This boils down to whether this is termed 'an invasion' or not.
Blinken is still scheduled to meet Lavrov in Geneva on Thursday."
Follow all the latest breaking news surrounding the Ukraine crisis in our dedicated live blog.
Musk lashes out at Warren again over taxes
Tesla CEO Elon Musk isn't standing down over his feud with Massachusetts Senator Elizabeth Warren.
Musk and the Democratic senator keep clashing over whether or not the tech billionaire pays taxes – and now he's suggested that the Internal Revenue Service (IRS) might give him a cookie, claiming that he "paid the most taxes ever in history for an individual" in 2021.
He tweeted his suggestion in response to comments made by Warren in an interview with CNN's "New Day" on Sunday.
"Elon Musk in 2018, we've actually seen his tax returns," Warren said. "You know how much he paid in taxes, one of the richest people in the world? Zero."
Romney's quiet push for child tax credit extension
Sen. Mitt Romney has largely worked with fellow Republicans on his version of the expanded child tax credit, but conversations with Democrats have increased in the last month or so, a senior GOP aide familiar with the proposal said.
“I think momentum is growing quite a bit, and there’s more interest because folks on the right want to do something,” the aide said. “I think folks on the left are realizing if they don’t do it bipartisan, it’s not going to happen.”
It's unclear which Democrats might be receptive to Romney's pitch. He said Thursday "there's several Democrats who have expressed interest and have spoken with me." He declined to name any.
Child poverty begins to increase after tax credit extension fail
New reports show that child poverty in the US increased by 3.7 million, partially because payments for the child tax credit has ended.
Is a bipartisan Child Tax Credit solution possible?
When he failed to pass the Build Back Better bill before Christmas, President Biden was criticised in some quarters for a perceived unwillingness to search for a bipartisan solution to the logjam. It meant that the expanded Child Tax Credit, so crucial in lowering the rate of childhood poverty last year, expired after the December payment.
There are now a number of Republicans in Congress who are willing to support a Child Tax Credit expansion, but they appear likely to demand cuts to other support programmes in turn.
For retirees the income caps for taxes are always the same, regardless of whether they withdraw funds from a private retirement account like a 401(k) or a Roth IRA, or receive social security benefits, or both. To calculate whether they need to pay taxes retirees will need to know their combined total income, but in most cases those who make under $25,000 a year will not see their benefits taxed.
Check out this handy guide to find out more on Social Security payments and tax season 2022...
FIle your taxes before the returns deadline to avoid paying fines
Tax Day 2022 is Monday, 18 April, the date by which the vast majority of filers will need to have submitted their returns. Failure to do so could land you in a world of trouble with the IRS able to add fines to your outstanding tax bill. Follow these tips to avoid getting hit with financial penalties this tax season.
Do 2021 stimulus checks affect my 2022 tax returns?
Tax season can be an overwhelming time, with various forms of incomings and outgoing to be accounted for down to the cent. However that task has become even more difficult in recent years due to a whole host of additional financial relief programes offered during the pandemic. Of the various schemes designed to support people through covid-19 the stimulus checks were the most widely distributed and the amount you received could have a bearing on you tax returns.
Have you filed your taxes? Are you now desperately waiting for the Social Security Administration and related systems to process them and issue your benefits? If so, you are not alone, with millions of Americans having the same query.
Allow us to provide some clarity on the whole situation.
Bipartisan group pushes for Social Security improvements
We write to urge you to discharge H.R. 82, the Social Security Fairness Act, from the Ways and Means Committee and bring it to the House floor for a vote as soon as possible.
“Passing the Social Security Fairness Act will immediately benefit millions of retired police officers, federal employees, first responders, and other public servants. H.R. 82 has significant bipartisan support – of the more than 7,700 bills introduced this Congress, only 18 have more co-sponsors – and it’s time for the House to vote.
Rep. Schiff hits out at inaction on Child Tax Credit
Before the end of 2021 President Biden tried desperately to secure enough votes in Congress to pass his Build Back Better bill, a revolutionary legislative package aimed at reshaping the American economy. However after failing to garner the required votes the proposal was abandoned and the bill has been shelved for now.
The failure to pass the bill, due in large part to the refusal of all 50 Republicans in the Senate to support the package, meant that the expanded Child Tax Credit expired after the December payments.
US financial aid: welcome
Good morning from the team at AS USA and our financial aid blog!
We'll be bringing you all the latest news and information on tax season 2022, including the latest on the IRS tax refund and the fate of the Child Tax Credit proposals.