Relief checks news summary | 24 January 2023
US Financial News: Latest Updates
Headlines | Tuesday, 24 January 2023
- Number of states still offering inflation relief payments this month
- 50,000 workers will be affected by tech layoffs
- Tax season 2023 gets underway - How to file electronically
- Median home price in the US rose to $386,300 in 2022, breaking previous record high
- California to send one last batch of inflation relief checks in February
- Sen. Manchin says Democrats need to negotiate over debt ceiling increase
- Will there be cuts to Social Security and Medicare during debt ceiling talks?
- What are the eligibility requirements for the Child Tax Credit this year?
- Medicaid enrollment has increased by 1.6 million in New York since 2020
- The IRS warns taxpayers of changes that they should be aware of as they submit their return
The US Supreme Court will rule over the constitutionality of President Biden’s order to forgive up to $20,000 in undergraduate student loan debt for millions of borrowers. Publicly, the GOP has come out strongly against student debt relief... but some of their written proposals cast a different, more sympathetic story.
The Inflation Reduction Act passed by Congress and signed into law by President Joe Biden in 2022 included a modification to the federal tax credit for Americans who purchase an electric vehicle. The new rules for the $7,500 IRS credit only apply to new vehicles purchased after 1 January 2023 but if you bought a car last year, your EV may qualify for the prior rules.
One major change to the Internal Revenue Code Section 30D, which the credit falls under, is that the electric vehicle must have its final assembly be in North America, this also applies to vehicles bought last year after 16 August. There are a few other requirements in order to qualify for the credit. We’ll walk you through what those are and how to apply for the credit.
Since early 2021, one of the most common grievances voiced by the private sector in the United States has centered on the difficulties they are facing in attracting and retaining workers. The economic crisis caused by the covid-19 pandemic that led to millions losing their jobs created one of the tightest labor markets in recent memory, giving workers the power to demand higher wages and better conditions and benefits.
However, as inflation began to pick up, many of these wage increases were erased. To combat inflation, the Federal Reserve began to increase interest rates, which, combined with continued economic uncertainty and corporate profit-seeking behavior, has led many high-profile companies to announce massive layoffs.
Read our full coverage for details on which companies are set to lay off thousands of workers.
The US Department of Justice, in conjunction with eight other states, filed an anti-trust lawsuit against Google. This is the DOJ’s second legal challenge to the tech behemoth’s market dominance and the fifth brought against it in the US since 2020.
The latest filing by the DOJ alleges that the tech giant “has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies.” The Department is seeking “equitable relief on behalf of the American public” in addition to “treble damages for losses” suffered by government agencies including the military which it claims overpaid for advertising displayed on the internet.
Calls for Live Nation and Ticketmaster to divorce after Taylor Swift concert fiasco
Joe Berchtold, president and CFO of Live Nation Entertainment was grilled on Tuesday by Senators in relation to the fiasco last fall by its ticket selling division, Ticketmaster, that left customers irrate and without tickets to the Taylor Swift's upcoming concert.
Lawmakers put the executive on the hot seat to inquire about whether the company was too dominant in the music industry controlling markets up and down the live entertainment supply chain.
There are calls for Live Nation and Ticketmaster to be broken up to reduce costs for consumers and allow more competition in the industry. The two companies merged in 2010 under an agreement with regulators that promised to encourage competition and lower ticket prices but a 2019 DOJ review found that Live Nation was not meeting its commitments.
David Balto, former DOJ trial lawyer in the anti-trust division and former FTC policy director, believes such a divorce would be possible and beneficial to customers and the industry.
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DOJ and eight states file anti-trust lawsuit against Google
Today’s complaint alleges that Google has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies.
For 15 years, Google has pursued a course of anticompetitive conduct that has allowed it to halt the rise of rival technologies, manipulate auction mechanics, to insulate itself from competition, and force advertisers and publishers to use its tools
The state began distributing the Middle-Class Tax Refund in late October and to date 7.1 million have been sent out via through direct deposit, with an additional 9.4 million on pre-paid debit cards.
The California Franchise Tax Board (CFTB) estimates that in total more than 31 million residents have benefited from the tax credit and that the program cost the state just over $9 billion. If you are yet to receive yours, there is one more batch of payments to be sent.
Here's when that money could arrive...
After the 2021 American Resuce Plan, families were able to claim a larger Child Tax Credit. While there are still some in Washington, on both sides of the aisle, who would like to see the program extended, no bills have been introduced. The impact of this inaction means that taxpayers with dependents will receive a smaller credit valued at $2,000.
Read our full coverage for details on how the value of the credit is determined.
The Internal Revenue Service began accepting and processing 2022 tax returns 23 January, and American taxpayers will have until 18 April 2023. While the agency expects most filers to get a refund, it warned that they might be smaller than in the past couple of years as covid-19 relief programs have come to an end.
However, to make sure that you get all the tax credits and deductions that you have coming your way to potentially increase your refund, or barring that, paying less taxes, there are a number of tax software programs. The top providers have both free and paid versions of their services that can make the process of submitting your 2022 tax return easier. Additionally, many have apps that allow you to use the software on your smartphone or even a tablet.
Read our full coverage for a look at the best software available in 2023 .
As part of the Inflation Reduction Act, the IRS is offering a $7,500 credit when you file, but who is it for and how do you apply? Find out how to apply for the tax credit...
The IRS offers a tool called “Where’s My Refund.” This allows taxpayers to check the status of their refund after providing their Social Security Number, the refund total, and their tax filing status.
Information on the status of one’s refund should be available within 24 hours of submitting an electronic refund or within the day that the IRS receives a paper refund in the mail. With tax season beginning on Monday 23 January, the earlier you file the sooner you will receive the result of the filing.
Why might returns be smaller?
In 2023, taxpayers should count on receiving lesser tax returns than in previous years. Actually, some individuals may have tax arrears... One [reason while it will be smaller] is to stop doing stimulation checks. In addition, the so-called “increased child credit” no longer exists.
Tax season is here, and many of us are looking at lower returns, reduced tax credits and deductions, and more significant costs overall due to rising prices and heavier debt burdens.
On January 23, the Internal Revenue Service will begin taking tax returns for 2022 income, with refunds being distributed in the following weeks and months. Compared to previous years, expect one a bit smaller.
Parallels made to 2011 debt ceiling crisis
Republicans have recently flipped the House of Representatives and are looking to use that control to pile pressure on a Democratic President, still in his first term in office, who passed a controversial spending package the year before. Sound familiar?
Not only is that the situation that Washington finds itself in now, but it was also the context for the debt ceiling crisis of 2011. The United States came closer to defaulting on its debt obligations than it has done in decades, before a compromise was eventually struck. There are concerns that this time around, with Congress increasingly partisan, tensions could be raised even further.
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Tax season is here and, for many filers, that will mean digging out your Social Security details to complete the various forms. But some people who are required to file taxes do not have a Social Security number.
If this is you, here's how you can submit your filing without an SSN...
White House Press Secretary outlines upcoming talks
"Like the President has said many times, raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos. Congress has always done it, and the President expects them to do their duty once again. That is not negotiable.
As for the broad economic debate in our country, the Speaker and his allies have said that they have a fiscal plan to cut Social Security, cut Medicare, cut other vital programs, and impose a 30 percent national sales tax."
California has been hammered by storms in recent weeks, brought about by a weather phenomenon known as an atmospheric river. In a state that has been experiencing a historic mega-drought for the past two decades, such severe rain has left some areas devastated and killed at least twenty-two people.
In response, the IRS has decided to extend tax season for residents of hard-hit counties, giving filers in those areas more time to submit their returns without facing penalties.
How to use IRS' Free File tax resource for free
Tax filing can seem like an overwhelming and time-consumer process, but there is a great online resource set up to help the majority of filers. The agency estimates that around 70% of filers are eligible to use the Free File tax return program, which simplifies the process.
For more information on how to utilise this handy resource, watch below...
Sen. Manchin wants talks on debt ceiling resolution
Congress is now facing the task of agreeing to a resolution to the debt ceiling issue after the country hit the upper limit of debt last week. The debt ceiling is defined by Congress and the two Houses need to come together to approve an increase to avoid a damaging default.
Sen. Joe Manchin, one of the most centrist members of the Democratic caucus, said that he wants to two parties to work on finding a bipartisan solution.
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After three years of pandemic-induced disruption, the IRS will be returning to normal in-person services this year to assist with filings. If you need some help with your tax return and have not been able to find the right support online, try contacting your local IRS office for guidance...
House GOP in the driving seat in debt ceiling talks
Senate Minority Leader Mitch McConnell has signalled that he is willing to let his colleagues in the House of Representatives take the lead on negotiations with the White House over the debt ceiling. The GOP has very little power in the Senate to dictate any terms, and with the final deadline months away, 'taking a backseat' may prove the most effective strategy to avoid backlash.
Republicans in the Senate likely support extracting concessions from Democrats over the debt ceiling but, without a majority, they have little leverage. The White House remains insisted that a debt limit increase must be passed without future spending cuts.
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Sen. Manchin will not support Social Security cuts
With the country having officially reached the statutory debt limit, there are renewed calls for significant changes to programs like Social Security to save federal money. Republicans in Congress are refusing to approve a raising of the debt ceiling without securing future spending cuts. However Sen. Joe Manchin, perhaps the most centrist member of the Democratic caucus, has dismissed the idea of Social Security cuts.
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The Social Security Administration was established in 1935 to provide financial support for retired workers who contributed to the program through taxes on earned income. Additional programs have been added over the years to cover benefits for disability, survivors and those with limited financial means.
While the standard amount of credits a worker must obtain to apply for retirement benefits is 40, each program has its own requirements. Here’s a look at how long you need to work in order to qualify for Social Security benefits.
Monday marked the start of tax season in the United States. The IRS has begun accepting returns relating to the 2022 tax year, with an estimated 168 million filers set to submit their taxes.
The deadline to file taxes is Tuesday, 18 April. You can request a six-month extension to give you more time to get your affairs in order, but you will still need to ensure that you have no outstanding tax liability when the original deadline arrive.
What next for the US debt ceiling?
The matter of rasing the debt ceiling has come to the forefront in the past week as the United States has reached the statutory limit on debt. This leaves the country unable to borrow any more money and the Treasury has been forced to resort to extraordinary measures to ensure that the US does not default.
However these measures will only last until June and Congress needs to raise the debt ceiling to ensure that the US can keep up with its financial obligations. Failure to do so would be catastrophic for the United States and the entire global economy.
Will the housing market bounce back this year?
The covid-19 pandemic and subsequent public health restrictions caused chaos for the markets. The housing market, in particular, has fluctuated wildly due to the changing economic conditions of the past two years. But there are finally signs that confidence is once again returning to the market as the United States begins to emerge from a period of high inflation that sparked a mssive rise in interest rates.
The housing market is closely tied to interest rates because those rates define how expensive mortgage agreements will be for prospective buyers. If the Federal Reserve is able to lower interest rates in the coming months we should see demand for houses increase and a flood of fresh capital into the housing market.
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Join us every day throughout tax season 2023 for all the latest news and information on tax filing. We'll have tips to boost your tax refund or minimise your tax bill, along with updates on extensions across the country.