Relief checks: 13 February summary news
Headlines: Monday, 13 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:
Despite inflation demand is expected to remain strong this Valentine's Day
Prices have been rising at a blistering pace over the past year across all sectors of the economy but that hasn't deterred consumers yet. It appears Valentine's Day will be no different with the National Retail Federation forecasting that on average Americans will spend almost $200 each for their Valentine.
The association estimates that total spending for the holiday will increase around 8.3% in 2023 to just shy of $26 billion up from less than $24 billion last year.
Residents of the Evergreen State now have a new annual tax credit available to them that could be worth up to $1,200. On 1 February the Washington State Department of Revenue launched the Working Families Tax Credit (WFTC) which refunds residents a portion of sales tax paid each year.
The WFTC is targeted at low-to-moderate-income households to help provide financial stability. Up to 400,00 eligible Washington workers and their families may receive money back this year. The credit is modeled after the federal Earned Income Tax Credit (EITC) program, considered one of the best tools for reducing poverty nationwide.
Stimulus checks feel like a long distant memory, the thought drifting away like trying to remember last night’s dream.
While there are no federal financial support plans announced, especially with most ending definitively with the expected announcement of the ‘end’ of the pandemic coming in May, individual states and cities are. These range from tax refund to trials of universal basic income. Many of these programmes is no longer accepting applications.
However, at the state level, relief remains available.Check out our full coverage for the details.
The 2023 Child Tax Credit is available to parents with dependents under 17 as of 31 December 2022 and who meet certain eligibility requirements. In 2021, the American Rescue Plan made big changes to the credit for one year that helped many families by allowing them to receive half of the value of the credit over six months rather than as a bulk sum when they file their taxes.
We take a look at the Child Tax Credit for this year, and who is eligible to receive the support...
Stock markets make gains ahead of January CPI inflation report
All three major Wall Street indexes made gains on Monday ahead of the Labor Department’s Consumer Price Index report on inflation for January. After dipping 0.1% in December, economists are predicting headline inflation to rise 0.5% last month. The past three months have seen inflation come in below forecasts, but a higher-than-expected reading could stymie a rally by stocks and bonds after taking a beating last year.
Currently, markets are confident that the Federal Reserve can pull off a “soft landing” as they pull back from the fastest pace of rate hikes since the 1980s, the last time inflation reached such heights as have been experienced over the past year. Tuesday’s CPI data will help investors parse out what any possible direction the central bank will take going forward to wrestle down rising prices back to policymakers target of 2%.
Last year, inflation in the United States reached historic levels.
Given the rising prices, particularly of staple goods, a number of government institutions approved sending stimulus checks or tax refunds as inflation relief for hard working Americans. Although inflation has fallen in recent months, support continues to be sent.
Here are the states sending checks or refunds in February and what the amounts are.
DADO RUVIC / REUTERS
Binance stablecoin backer ordered to stop issuing cryptocurrency token
The New York Department of Financial Services has ordered Paxos Trust Company to stop minting Binance USD citing "unresolved issues" in its relationship oversight with Binance. Binance USD, with roughly $16 billion in circulation, is the third-biggest stablecoin, digital tokens typically backed by traditional assets like the US dollar. The move by the chief financial regulator in New York is a major setback for Binance to gain against its main stablecoin rivals like Tether and USD Coin.
Paxos told Reuters that it will cease to issue new Binance USD as of 21 February, but will continue to support and redeem the tokens until at least February 2024.
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.
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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.
IRS says which inflation relief and disaster payments will not be taxed
The IRS announced that people in a number of states will not need to pay tax on state disaster payments on their tax return. These payments include the Middle Class Tax Refund in California which was sent out from the summer to the winter of last year. It was not known until this statement was released whether payments like this would count as taxable income.
“The IRS appreciates the patience of taxpayers, tax professionals, software companies and state tax administrators as the IRS and Treasury worked to resolve this unique and complex situation,” the IRS said Friday evening in a statement.
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 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.
Due to the monumental nature of issuing so many payments, the agency spreads out when they are sent depending on date of birth, type of benefit and when a recipient first signed up for Social Security.
This creates a situation where every so often certain beneficiaries receive more than one payment in a calendar month. March will be one of those months, along with June, September and December in 2023. Another group of beneficiaries always gets double payments as they receive both Social Security and Supplemental Support Income.
Used electric vehicles also receive a rebate
For used vehicles, a credit equivalent to 30% of the sale price is offered. This could be as much as $4,000. A series of requirements must be met in order to qualify for this element:
The vehicle must have been purchased for use and not for resale.
You must not be the original owner.
There must be no claims as a dependent on the tax return of another citizen.
Must not have applied for another credit in the three years prior to the purchase of the electric vehicle.
Have an adjusted gross income, which depends on the case. In the case of a married filing jointly or a living spouse, it will be $150,000. In the situation of a head of household, it will be $112,500. Finally, for other taxpayers, this element will be 75,000.
Eligibility requirements to receive up to $7,500 for purchasing a car with the EV Tax Credit
Earlier this year, the United States made a decision that could be vital in encouraging the purchase of electric vehicles. The Administration launched a tax credit for which many citizens can opt for a benefit of up to $7,500 if they purchase an electric car.
However, it must be taken into account that there are a series of requirements that must be met in order to be able to purchase this form of transport, which is safer and cleaner for the environment.
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...
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."
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.
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...
Hello and welcome to AS USA's live feed on financial news for Monday, 13 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.