Relief checks: 12 February summary news
Headlines: Sunday, 12 February 2023
- Initial unemployment claimsincreasedby 13,000 to 196,000
- More taxes on the rich, Biden’s formula against inequality
- Michigan to send $180 inflation relief checks: who qualifies and when will they arrive?
- Debt ceiling negotiations continue with cuts to Social Security and Medicare off the table after confrontation at the State of the Union
- US trade deficit grew to $67.4 billion in December up from $61 billion a month earlier
2023 Tax Season
- A look at the most undervalued housing markets in the United States
- Tax season is here: top tips to avoid errors when filing your return
- Actions that can be taken if your tax refund is stolen or never arrives
Read more from AS USA:
SNAP benefits, also known as food stamps, became a crucial form of financial support for millions of families. The federal government introduced Emergency Allotments (EA) to increase the amount on offer to recipients.
The program has gradually been rolled back in the past year and February 2023 will be the final month in which recipients in certain states, those still offering the boost, can benefit from the EA. The Center on Budget and Policy Priorities (CBPP) reports that 35 states and territories are still paying EAs this month, but that additional support will end in March.
We take a look at who will be affected...
What next for the debt ceiling?
The fate of the US debt ceiling will likely move to the forefront of conversation in Washington in the coming weeks as President Biden looks to secure an increase. The nation reached its statutory debt limit last month and the Treasury could become unable to cover financial obligations as early as June.
Steve Forbes, editor-in-chief of Forbes magazine, has some suggestions for Biden and House Speaker Kevin McCarthy to help break the deadlock.
Am I eligible for $30 a month for internet bills?
Last year President Biden signed into law the Bipartisan Infrastructure Bill, providing funding for a variety of programs and initiatives designed to boost the economy and improve conditions for Americans. Included in the huge package was the Affordable Connectivity Program, which aims to improve internet access across the country.
A White House fact sheet explains that the program "provides eligible households $30 per month off their internet bills," and a "one-time discount of up to $100 to purchase a laptop, desktop computer, or tablet from participating providers."
Residents in a number of states received additional financial support during 2022, typically in response to disasters. These 'special payments' were provided by local authorities, but are they subject to federal taxes?
We take a look at what the IRS has said so far, and what their advice is to taxpayers...
How to check the status of your tax return
The IRS has a tool called “Where’s My Refund” which is accessible online. 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 is available 24 hours after a filing has been submitted. Another good use of the tool is its notifications if there is an error with an application, allowing filers to make changes quickly. This will require your return to be sent electronically instead of paper.
For those who have not seen any changes to their filing status and filed a paper return, the IRS offers a help line which can be reached at 1-800- 829-4477.
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Tax filers will be eager to know if and when they will be receiving a tax refund. Filing a tax return as soon as possible is the best way to make sure your return is processed promptly; the IRS will be sifting through tens of millions of tax returns on a first-come-first-served basis.
Typically the IRS is able to distribute a tax refund within 21 days so long as the return is filed electronically. Those who file with paper may have to wait up to six months to receive their refund.
Sellers return to the housing market but at a much slower rate compared to last year
In the second part of 2022 the US housing market underwent a significant change as the number of homes on the market began to dry up. The slump in new listings was blamed for an increase in house prices as demand continued to outstrip supply. It looks like that trend is starting to wane but, for now, only gradually.
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The Child and Dependent Care Credit is designed to ease the burden of childcare for working people. If you have to pay to ensure a child or dependent is looked after while you are at work, you will most likely be able to claim the credit.
For the 2022 tax year parents and care-givers can claim the tax credit to cover employment-related expenses worth up to $3,000 per dependent, up to a maximum of $6,000. The total amount of the credit cannot exceed 20-35% of your expenses, depending on your income level.
How to receive the Earned Income Tax Credit
These are the requirements to receive the Earned Income Tax Credit:
- Have worked and earned income less than $59,187
- Have investment income less than $10,300 in tax year 2022
- Have a valid Social Security number by the due date of your 2021 return
- Be a US citizen or resident alien for the entire year
- Cannot file a Form 2555 (Foreign Earned Income)
EITC refunds will begin to be issued until the end of February. The exact date will depend on the moment the taxpayer made their declaration.
When filing your taxes, you may be able to apply for any of the tax credits offered by the tax collection agency, including the Earned Income Tax Credit (EITC), which is aimed at low-income individuals and families.
EITC recipients can receive up to $6,935, almost $7,000. However, the exact amount will depend on the situation of each family or individual applying, such as the number of children one has or annual income.
What is a 'tight' housing market?
The United States housing market has undergone a tumultuous few years since the start of the pandemic, with interest rate changes spooking investors and making life very difficult for mortgage-holders. Currently the housing market is incredibly tight, meaning that there are almost no vacant home for sale. This means that those with a home at the moment have little choice but to stay where they are.
The saying goes “sharing is caring” and Uncle Sam will look the other way up to a point. Should you cross the thresholds of the Gift Tax exemption you could face a tax rate of 18 percent to 40 percent.
The Tax Cut and Jobs Act passed in 2017 increased the lifetime limit that Americans are allowed to gift in the form of money or property to family and friends for nothing in return.
Should you surpass the annual gift tax limit you will eat away at your lifetime exclusion. Here’s a look at the amounts you can give without getting taxed.
Debt ceiling is on the agenda at the White House
President Biden hosted the nation's governor's at the White House on Friday and the debt ceiling talks were high on the agenda. Biden told the gathered governors that he hoped to secure a solution without agreeing to future budget cuts, while ensuring that the nation's economic position remains secure.
“I believe we can be fiscally responsible without threatening our country,” Biden said. “I don’t think my colleagues are really serious – I hope they’re not – about holding the debt hostage to cuts they want to make in certain things that I may or may not want to make.”
Should I pay tax on the California relief payments?
Earlier this month the IRS advised filers who had received a state-funded relief check in 2022 to hold off on submitting their taxes. The federal tax agency still had to decide whether the payments, many of which were termed 'tax refunds', would be liable for federal taxation.
The IRS is gradually ruling on the various programs and has confirmed that recipients of the California Middle Class Tax Refund will not be subject to federal taxes on the payment. Good news for Californians!
Hello and welcome to AS USA's live feed on financial news for Sunday, 12 February.
Fears of a general recession have receded for now as the US economy continues to power forward. But economists think the nation may be in the grip of a phenomenon seen before in the 1980s, a “rolling recession”, where an economic downturn sweeps through sectors one-by-one.
Additionally, inflation still remains uncomfortably higher than policymakers would like who have signaled that interest rate hikes will continue. Although he was surprised by the "extraoridinarily strong" jobs report for January, Fed Chair Jerome Powell said that he expects 2023 to be a year of "significant declines in inflation.