ReportWire

Tag: tax deductions and credits

  • California is about to give Hollywood studios a lucrative tax deal during the writers’ strike | CNN Business

    California is about to give Hollywood studios a lucrative tax deal during the writers’ strike | CNN Business

    [ad_1]



    CNN
     — 

    The state of California is about to give movie and TV studios a new lucrative tax perk.

    A bill awaiting California Gov. Gavin Newsom’s signature would the state’s tax incentive program for film and TV productions for five years but with a key update: Studios with more tax credits than they can use will be able to exchange those credits for cash. The bill, part of the state’s overall budget plan, was passed by California legislators on Tuesday, and Newsom is expected to sign it on Friday.

    The bill also mandates any production that receives the tax credit to comply with new on-set firearm safety protocols following the 2021 deadly shooting on the set of Alec Baldwin’s film “Rust,” and it implements requirements aiming to meet diversity hiring targets.

    The new, refundable tax credits come as competition for film and TV production from other states and countries is on the rise. States like New York and Georgia are gaining share of the TV and film market, thanks to their own tax incentive programs, according to a 2021 report from FilmLA — a nonprofit organization that helps creators with production planning and film permitting.

    The bill should be a boon for studios like Netflix. The streaming giant had not previously been able to take full advantage of the tax credit program since it uses a separate research and development incentive from California to significantly reduce its tax liability. In a 2020 SEC filing, Netflix said it had $250 million in California R&D tax credits — far more than it could use.

    Disney and Comcast’s Universal Studios were the only two studios that benefited under California’s existing tax incentive program, due to their relatively larger tax bills from theme parks, according to Democratic assemblywoman Wendy Carrillo, one of the bill’s sponsors. The new bill could benefit other studios that don’t have theme parks in the state, including Warner Bros, which is owned by CNN parent company Warner Bros. Discovery.

    The bill’s safety measures require productions to employ an adviser to oversee production safety and complete detailed risk assessments. Studios must also establish training requirements and standards that focus on the safe handling of firearms. Many of these safety protocols were voluntary before the bill.

    Dave Cortese, the Democratic state senator who introduced the safety protocols in the bill, said research for the legislation began soon after actor Baldwin fired a live round of ammunition from what he said he believed to be an unloaded prop gun during a film’s rehearsal. Cinematographer Halyna Hutchins was killed.

    “Conversations about this legislation started the week after the tragic loss of a cinematographer. Those negotiations have produced the nation’s first and best safety practices for California workers in the state’s vital motion picture industry,” Cortese said.

    In addition to refundable tax credits and stricter safety standards, the bill establishes specific diversity requirements. Studios must submit data about the diversity of their workforce to qualify for the full credit. The bill also adds a new member to the state’s film commission with diversity, equity, and inclusion expertise.

    The tax perk for Hollywood comes amid ongoing tension between the industry’s workforce and the studios’ bosses. The Writers Guild of America, has been on strike since early May, halting the production of many shows. The association’s more than 11,000 members are fighting over substantial issues like pay, the number of writers staffed on any given project, and whether artificial intelligence can be used in writing material.

    Actors may soon stage a work stoppage, as well. Members of the actors’ union, SAG-AFTRA, have voted to authorize a strike against the major studios if they cannot agree to the terms of a new contract. Similar to the WGA, the actors’ union has voiced similar concerns about pay and the use of AI.

    Democratic lawmakers in California celebrated the bill. Carrillo said the plan was a “grand compromise,” and it would help protect jobs in the state.

    “These are hundreds of thousands of jobs, most of which impact Los Angeles County and the city of Los Angeles. They’re good union jobs, they’re production jobs, they’re creative jobs,” she said.

    However, the bill has attracted some criticism. Chris Hoene, the executive director of the California Budget & Policy Center, a nonprofit think tank that provides analysis on state budget issues intending to improve outcomes for low-income communities and people of color in the state, called it “bad policy.”

    “Refundable tax credits were designed to help low-income households… so to take that refundability structure and apply it to a business tax credit, you would think there are some film companies that struggle to make ends meet and don’t make enough money to owe any taxes, but that’s not how it works,” he said.

    Hoene called the new policy a “giveaway that doesn’t have any positive outcomes.”

    The refundable credits are designed to help more than just the big studios, Carrillo said. Film and TV productions help support surrounding businesses in the area, including “small restaurants and catering services,” Carrillo said.

    “It’s very important that California has a competitive advantage and ultimately keeps these jobs and productions in our state while other states continue to announce more incentives,” she added.

    Still, Hoene argued that there were more effective ways to create well-paying jobs in California.

    “If we wanted to take scarce state resources to help workers, we could do that in ways that could provide them with assistance directly, rather than giving it to large corporations who are already minimizing their tax bills in other ways,” he said.

    [ad_2]

    Source link

  • ‘You’ve underestimated us’: How McCarthy’s horse-trading stopped a GOP revolt in debt fight | CNN Politics

    ‘You’ve underestimated us’: How McCarthy’s horse-trading stopped a GOP revolt in debt fight | CNN Politics

    [ad_1]



    CNN
     — 

    Speaker Kevin McCarthy rolled the dice.

    As he took his short walk from the speaker’s suite to the House floor on Wednesday evening, the California Republican wasn’t entirely sure he would have the votes on the most important bill of his young speakership: To raise the $31.4 trillion national debt limit on Republican support alone.

    McCarthy knew he was close but couldn’t guarantee it, according to a person familiar with the matter.

    After months of internal discussions, the speaker had been engaged in round-the-clock talks with pockets of dissident members, cutting deals and horse-trading to pick off one GOP vote after another in his high-stakes fight – all an attempt to show the White House and the country that his party speaks with one voice on the consequential economic battle.

    But one Republican member was absent on Wednesday – and some hard-right members would not explicitly say how they’d vote, forcing the speaker to make a risky bet. In the end, it was two Democratic absences that helped McCarthy: Allowing him to pass the bill on the narrowest of margins, 217-215, and now shifting the focus to the White House and Senate Democrats.

    “We are the only ones to lift the debt limit to make sure this economy is not in jeopardy,” McCarthy beamed in the Capitol’s ornate Statuary Hall moments after the gavel came down, calling on President Joe Biden to negotiate a spending-cut deal he has resisted for months. He added: “You’ve underestimated us.”

    It was an effort that was months in the making. Immediately after securing the speakership in a messy, 15-ballot race, McCarthy made the concerted decision to avoid the pitfalls of a predecessor, John Boehner, and allow rank-and-file members to feel like they could shape the ultimate package rather than being steamrolled by leadership. A dozen listening sessions were held by two members of his whip team, Reps. Tom Emmer of Minnesota and Guy Reschenthaler of Pennsylvania, starting in February and continuing with them calling every member through this past weekend. Then there were regular meetings of the so-called “five families” – nicknamed after the mob families in “The Godfather” – that represent various ideological factions of the conference and were led by Rep. Garret Graves of Louisiana.

    But even after they had agreed to an outline of their deal last week, McCarthy continued to run into pitfalls. In a meeting last week in the basement of the Capitol, he and his team moved to appease conservatives who wanted to target tax breaks for biofuels in the Democrats’ Inflation Reduction Act. McCarthy agreed, prompting a furious pushback by Iowa Republicans, including a tense phone call between Gov. Kim Reynolds and McCarthy.

    It was an issue that could have derailed the bill and one that put McCarthy in familiar crosshairs between competing factions of his conference. But he ultimately cut a deal past 2 a.m. on Wednesday and helped move closer to securing the votes more than 15 hours later.

    “They realized that you were not going to be able to steamroll four people from Iowa,” said Rep. Zach Nunn, an Iowa freshman, referring to the four GOP members of the delegation.

    Yet more problems emerged, and McCarthy moved to head them off. Rep. Nancy Mace told reporters Wednesday morning she was ready to vote against the plan over her concerns it didn’t go far enough to balance the budget. But after an afternoon meeting in his office, the South Carolina Republican said she would back the plan. The promise, according to a source familiar with the matter: Votes on bills dealing with women’s access to reproductive health care and a vote on a bill dealing with active shooter alerts.

    “I haven’t gotten rolled yet by the leadership on anything,” Mace said, defending her deal-cutting.

    The ultimate plan would raise the debt limit by $1.5 trillion and propose to implement a slew of spending cuts to domestic programs, in addition to new work requirements on Medicaid beneficiaries and provisions targeting Biden’s domestic and regulatory agenda. It would save $4.8 trillion over the next 10 years, according to the Congressional Budget Office. But the $1.5 trillion increase would only last through March 2024 at the latest.

    In a private meeting in the Capitol, GOP leaders debated how high of a debt limit increase they should seek. Some had floated odd numbers because it sounded more intentional than an even number. One member suggested $1.69 trillion, but that was rejected because of the innuendos associated with such a figure, according to three GOP sources. Ultimately, a $1. 5 trillion increase was the number they settled on.

    Republicans say the deal-cutting that has since transpired was the result of new relationships forged from McCarthy’s drawn-out fight for the speaker’s gavel in January.

    “Absolutely, it has reaped benefits to everyone in the conference,” Rep. French Hill, a Republican of Arkansas, said of the relationships that were formed.

    But passing the bill was never a sure bet – something McCarthy sensed last week as he moved to appease conservatives and push for a repeal of energy tax breaks.

    “This is going to come back to bite us,” McCarthy warned conservatives last week, according to a person in the room, as they demanded the bill repeal green energy tax credits and other provisions in the Inflation Reduction Act. McCarthy feared taking that step would unlock a process allowing the Senate to later jam the House on thorny tax-related provisions.

    But he had a more immediate problem: The governor of Iowa.

    A fired-up Reynolds, the two-term Republican governor, was on the phone with McCarthy on Tuesday, relaying concerns over the provision in his debt ceiling plan to repeal tax breaks for ethanol use, according to people familiar with the call, warning it would be detrimental to farmers in her state.

    All four GOP members of the Iowa delegation, who were also in constant communication with the governor, informed leadership in a Tuesday night meeting that clawing back the tax credits was a “red line” for them, according to sources in the room.

    McCarthy now had a math problem. His allies had believed that the Iowa Republicans, some of the closest allies of leadership, would swallow the provisions and ultimately side with their party in their high-stakes fight with the White House. But they had miscalculated, forcing the speaker to cut a last-ditch deal after repeatedly insisting they would not open the bill to changes.

    Nunn, the Iowa Republican, told CNN he learned about the deal at around 2:30 a.m. on Wednesday, when Graves came to his office along with Rep. Michelle Fischbach, a Minnesota Republican who had similar issues with the ethanol provisions.

    “We had been in conversation throughout the entire day, but by Tuesday, we had really ratcheted up,” Nunn told CNN. “Iowa nice also means Iowa stubborn.”

    It was an issue that GOP leaders had sought to avoid. They had worried that if they cut a deal with the Iowa delegation, they would have to make similar deals with members from fossil-fuel heavy districts in order to make them happy.

    And the leadership knew if they were going to make 11th-hour changes to appease Midwestern Republicans, they’d have to offer some concessions to conservatives as well, and ultimately agreed to a faster implementation of the Medicaid work requirements. Yet even that wasn’t enough to satisfy some conservatives who had been pushing for that change – namely GOP Rep. Matt Gaetz of Florida, who was upset that the deal was cut at the last minute after the leaders said they wouldn’t change the bill, according to people familiar with the matter. He was one of four who later voted against the plan.

    Rep. Ken Buck, a member of the whip team, said in the end, he voted “no” because the GOP bill didn’t do enough to reduce the deficit. The Colorado Republican told CNN, “$58 trillion with Biden’s numbers and $53 trillion, it’s just too much debt.”

    But one member that McCarthy had been lobbying came through: freshman Rep. Eli Crane. The Arizona Republican had been wavering on the bill and was being heavily whipped by leadership, but said he ultimately backed the legislation because of his constituents.

    “We conducted a poll at a teletown hall last night and the people that responded overwhelmingly supported this bill,” he told CNN. “It kind of surprised me, honestly.”

    With this victory secured, McCarthy could later have an even bigger test on his hands: If he is forced to ask his conference to get behind any deal with Biden to raise the debt limit – something that almost certainly wouldn’t go as far as the House plan for spending cuts.

    His members are watching him closely.

    “What Kevin has assured us is he’s not coming back and presenting a watered-down version,” said Rep. Ralph Norman of South Carolina, a member of the House Freedom Caucus.

    [ad_2]

    Source link

  • Today is Tax Day. Here’s what you need to know if you haven’t filed your return yet — and even if you have | CNN Business

    Today is Tax Day. Here’s what you need to know if you haven’t filed your return yet — and even if you have | CNN Business

    [ad_1]

    Editor’s Note: This is an updated version of a story that originally ran on April 14, 2023.


    New York
    CNN
     — 

    It’s April 18, the official deadline to file your federal and state income tax returns for 2022. (It is also, apparently, National Animal Crackers Day for those who celebrate.)

    Whether you have already filed your tax return or still need to, the good news is this tax filing season has gone much more smoothly than the past three, which were hurt by the pandemic.

    “This is the first tax season since 2019 where the IRS and the nation were on normal footing,” IRS Commissioner Danny Werfel said in a call with reporters.

    For instance, Werfel noted that since January, thanks to an infusion of some new funding after years of budget cuts, IRS employees have been able to answer 87% of calls from filers with questions. Last year, they answered fewer than 15%. And the wait times on those phone calls dropped to just 4 minutes this filing season from 27 minutes last filing season.

    The agency also added a roster of new online tools for filers, he added.

    Those online tools may be especially helpful today if you are scrambling to get your return in before midnight. Or, if you’ve come to the realization that you need to file for an extension. Either way, here are some key things to know:

    Not everyone has to file on April 18: If you live in a federally declared disaster area, have a business there — or have relevant tax documents stored by businesses in that area — it’s likely the IRS has already extended the filing and payment deadlines for you. Here is where you can find the specific extension dates for each disaster area.

    Thanks to many rounds of extreme weather in recent months, for instance, tax filers in most of California — which accounts for 10% to 15% of all federal filers — have already been granted an extension until Oct. 16 to file and to pay, according to an IRS spokesperson.

    If you’re in the armed forces and are currently or were recently stationed in a combat zone, the filing and payment deadlines for your 2022 taxes are most likely extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or left) the combat zone. This IRS publication offers more detail.

    Lastly, if you made little to no money last year (typically less than $12,950 for single filers and $25,900 for married couples), you may not be required to file a return. But you may want to anyway if you think you are eligible for a refund thanks to, for instance, refundable tax credits such as the Earned Income Tax Credit. (Use this IRS tool to gauge whether you are required to file this year.) You also are likely eligible to use IRS Free File (intended for those with adjusted gross income of $73,000 or less) so it won’t cost you to submit a return.

    Your paycheck may not be your only source of income: If you had one full-time job you may think that is the only income you made and have to report. But that’s not necessarily so.

    Other potentially taxable and reportable income sources include:

    • Interest on your savings
    • Investment income (e.g., dividends and capital gains)
    • Pay for part-time or seasonal work, or a side hustle
    • Unemployment income
    • Social Security benefits or distribution from a retirement account
    • Tips
    • Gambling winnings
    • Income from a rental property you own

    Organize your tax documents: By now you should have received every tax document that third parties are required to send you (your employer, bank, brokerage, etc.).

    If you don’t recall receiving a hard copy of a tax form in the mail, check your email and your online accounts — a document may have been sent to you electronically.

    Here are some of the tax forms you may have received:

    • W-2 from your wage or salaried jobs
    • 1099-B for capital gains and losses on your investments
    • 1099-DIV from your brokerage or company where you own stock for dividends or other distributions from their investments
    • 1099-INT for interest over $10 on your savings at a financial institution
    • 1099-NEC from your clients, if you worked as a contractor
    • 1099-K for payments for goods and services through third-party platforms like Venmo, CashApp or Etsy. The 1099-K is required if you made more than $20,000 in over 200 transactions during the year. (Next year the reporting threshold drops to $600.) But even if you didn’t get a 1099-K you still must report all the income that you made over third-party platforms in 2022.
    • 1099-Rs for distributions over $10 that you received for a pension, annuity, retirement account, profit-sharing plan or insurance contract
    • SSA-1099 or SSA-1042S for Social Security benefits received.

    “Be aware that there’s no form for some taxable income, like proceeds from renting out your vacation property, meaning you’re responsible for reporting it on your own,” according to the Illinois CPA Society.

    One very last-minute way to reduce your 2022 tax bill: If you’re eligible to make a tax-deductible contribution to an IRA and haven’t done so for last year, you have until April 18 to contribute up to $6,000 ($7,000 if you’re 50 or older). That will reduce your tax bill and augment your retirement savings.

    Proofread your return before submitting it: Do this whether you’re using tax software or working with a professional tax preparer.

    Little mistakes and oversights delay the processing of your return (and the issuance of your refund if you’re owed one). You want to avoid things like having a typo in your name, birth date, Social Security number or direct deposit number; choosing the wrong filing status (e.g., married vs single); making a simple math error; or leaving a required field blank.

    What to do if you can’t file by April 18: If you’re not able to file on time, fill out Form 4868 electronically or on paper and send it in no later than today. You will be granted an automatic six-month extension to file.

    Note, however, that an extension to file is not an extension to pay. You will be charged interest (currently running at 7%) and a penalty on any amount you still owe for 2022 but haven’t paid by April 18.

    So if you suspect you still owe tax — perhaps you had some income outside of your job for which tax wasn’t withheld or you had a big capital gain last year — approximate how much more you owe and send that money to the IRS by the end of today.

    You can choose to do so by mail, attaching a check to your extension request form. Make sure your envelope is postmarked no later than April 18.

    Or the more efficient route is pay what you owe electronically at IRS.gov, said CPA Damien Martin, a tax partner at EY. If you do that, the IRS notes you will not have to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency notes in its instructions.

    If you opt to electronically pay directly from your bank account, which is free, select “extension” and then “tax year 2022” when given the option.

    You can also pay by credit or debit card, but you will be charged a processing fee. Doing so, though, may become much more costly than just a fee if you charge your tax payment but don’t pay your credit card bill off in full every month, since you likely pay a high interest rate on outstanding balances.

    If you can’t pay what you owe in full, the IRS does have some payment plan options. But it might be smart to first consult with a certified public accountant or a tax preparer who is an enrolled agent to make sure you are making the best choice for your circumstance.

    If you still owe income taxes to your state, remember that you may need to go through a similar exercise of filing for an extension and making a payment to your state’s revenue department, Martin said.

    Use this interactive tax assistant for basic questions you may have: The IRS provides an “interactive tax assistant” that can help you answer more than 50 basic questions pertaining to your individual circumstance on income, deductions, credits and other technical questions.

    If you’ve already filed your return, you’re probably glad to have it in the rear view mirror. But you may still have a few questions about what’s ahead.

    What about my refund? If you are due a refund, the IRS typically sends it within 21 days of receiving your return. When yours does arrive, it may be smaller than last year, even if your financial life didn’t change much. That’s because a number of Covid-related tax breaks expired.

    So far, the average refund paid was $2,878 for the week ending April 7, down from $3,175 at the same point in last year’s filing season.

    Will I be audited?: The reasons and methods for auditing a taxpayer can vary — and many audits result in “no change,” meaning you don’t end up owing anything more to the IRS. But one thing is common for the vast majority of US tax filers: Audit rates are exceedingly low.

    For filers reporting incomes between $50,000 and $200,000, only 0.1% of them were audited in 2020, according to the latest data from the IRS. Even for very high income filers, audit rates were quite low: Just 0.4% for those reporting income of between $1 million and $5 million; 0.7% for those with income between $5 million and $10 million; and 2.4% for returns with income over $10 million.

    Looking ahead, the IRS commissioner noted in a press call that the agency will be using money from the Inflation Reduction Act to bolster its compliance efforts to focus more on auditing high-income individuals — defined as making $400,000 or more. As for filers with income below that level, he said he did not anticipate any change in the likelihood they would be audited.

    [ad_2]

    Source link

  • EPA proposes new tailpipe rules that could push EVs to make up two-thirds of new car sales in US by 2032 | CNN Politics

    EPA proposes new tailpipe rules that could push EVs to make up two-thirds of new car sales in US by 2032 | CNN Politics

    [ad_1]



    CNN
     — 

    The Environmental Protection Agency on Wednesday proposed ambitious new car pollution rules that could require electric vehicles to account for up to two-thirds of new cars sold in the US by 2032, in what would be one of the Biden administration’s most aggressive climate-change policies yet.

    The tailpipe standards would also have the effect of cutting planet-warming pollution from cars in half. Transportation accounts for nearly 30% of all greenhouse gas emissions in the US, according to the EPA.

    EPA Administrator Michael Regan called the regulations “the strongest-ever federal pollution standards for cars and trucks.”

    Regan touted the proposed rules on “CNN News Central” on Wednesday, claiming they would bring down costs for consumers and slash planet-warming pollution.

    “This is a future for everyone, and we’re starting to see all of the auto industry move in this direction,” Regan told CNN’s Sara Sidner, saying strong auto emissions rules have been part of President Joe Biden’s “vision from day one.”

    EPA officials said that they are considering several different emissions proposals, which could result in anywhere from a 64% to 69% electric vehicle adoption rate by early next decade. If approved, the emissions standards would start model year 2027 vehicles.

    The agency anticipates the new rules would mean EVs could also make up nearly half of all new medium-duty vehicles, like delivery trucks, by model year 2032. Officials are also proposing stronger standards for heavy-duty vehicles, including dump trucks, public utility trucks, and transit and school buses.

    One expert told CNN the Biden administration’s proposal is a pivotal moment for the US auto industry and consumers.

    “It’s a pretty big deal,” said Thomas Boylan, a former Environmental Protection Agency official and the regulatory director for the EV trade group Zero Emission Transportation Association. “This is really going to set the tone for the rest of the decade and into the 2030s in terms of what this administration is looking for the auto industry to do when it comes to decarbonizing and ultimately electrifying.”

    Regan and White House National Climate Adviser Ali Zaidi hailed the proposed regulations as a major climate win that would also save American consumers money in the coming years.

    Zaidi said that in the Biden administration’s first few years, the number of EVs on US roads had already tripled, while the number of public charging stations had doubled. And Zaidi vowed more to come, with funding from Biden’s infrastructure law for a network of EV charging stations combined with consumer tax credits.

    “Whether you measure today’s announcements by the dollars saved, the gallons reduced, or the pollution that will no longer be pumped into the air, this is a win for the American people,” Zaidi said.

    Yet even as the administration is writing aggressive regulations to push the market toward EVs, a Gallup poll released Wednesday suggests that Americans are not yet sold on the idea. Gallup polled more than 1,000 adults in the US last month and found that 41% said they would not buy an electric vehicle.

    Not only are EVs still more expensive than gas-powered cars, but consumers also haven’t yet grasped the climate benefits of transitioning to zero-emissions vehicles, the poll found. Six in 10 respondents said they believe EVs help the environment “only a little” or “not at all,” Gallup reported.

    Transportation is the biggest source of planet-warming pollution in the US, and light duty vehicles – the average cars Americans drive – account for 58% of those emissions. The UN’s Intergovernmental Panel on Climate Change reported last year that aggressive, pollution-slashing changes in the global transportation sector – including the transition to EVs – could reduce the sector’s emissions by more than 80%.

    Speaking on CNN, Regan also emphasized that switching to an EV would save consumers money in the long run.

    “Folks who purchase electric vehicles will see a cost savings over the lifespan of the vehicle, because they’re not having to buy gas, having to pay for maintenance,” Regan said. “So this is a huge opportunity for everyone in this country.”

    Other countries, including the EU and China, are moving faster toward adopting EVs. In the US, California has already proposed that zero-emissions vehicles make up 70% of new car sales by 2030, and 17 other states plan to follow California’s lead.

    That means much of the US car industry will already be transitioning ahead of the proposed federal rules.

    “I believe it’s pretty doable,” Margo Oge, chair of the International Council on Clean Transportation and a former Obama EPA official, said of the aggressive transition to EVs. “The industry is there. Europe is ahead of the US, China is ahead of Europe – and these companies are global companies.”

    New federal tax credits are coming next week that aim to help American consumers save up to $7,500 on an EV. But they have incredibly complex requirements for the auto industry – including that the cars’ batteries and components come from the US or countries it has a free-trade agreement with.

    Still, Boylan said the regulations are designed to gradually work over the next decade, by which time consumers should have far more electric vehicle options to choose from.

    “You’ve got the tax credits as the carrot,” Boylan said. The proposed tailpipe regulation “provides the stick to backstop these incentives and push the industry forward.”

    Regan told CNN the rules would be phased in gradually, giving auto makers and consumers years before they fully go into effect. During that time, the administration is focused on installing more EV charging stations and expanding access to $7,500 federal EV tax credits.

    “What we’re looking at is a ramp-up period,” Regan said on CNN. “We’re going to see a massive buildup over the next couple years, and we’re starting to see those electric vehicle sales numbers grow already.”

    The EPA will take public comment on the proposal before finalizing the rules in the coming months.

    [ad_2]

    Source link

  • Taxes and adulting: What to know about filing taxes on your own for the first time | CNN Business

    Taxes and adulting: What to know about filing taxes on your own for the first time | CNN Business

    [ad_1]


    New York
    CNN
     — 

    For most people in their early- to mid-20s, filing taxes is right up there with having to pay rent and realizing you can’t take summers off anymore: an unwelcome fact of being an adult.

    If you’re a recent graduate working your first full-time job or supporting yourself for the first time, this tax-filing season may indeed be your first experience doing your own taxes without the help of a parent.

    So here are seven things to keep in mind.

    If you’re confounded by filing your taxes, you may think it’s because you’re young and inexperienced. Nonsense. Tax filers of all ages get confused by tax rules and the intricacies of all the tax documents required. And it doesn’t help that tax provisions are tweaked frequently.

    Your tax return is a financial snapshot of your life over a 12-month period, in this case 2022. And a lot can happen during that time that will have tax implications and need to be reported.

    “Think about what went on in your life in the past year,” said Tom O’Saben, the director of tax content at the National Association of Tax Preparers.

    For example, O’Saben asked, did you work more than one job? Did you move for a new job? Did you get laid off? Did you get married or have a child? Did you make student loan payments? Did you make money selling anything you own? Did you buy a home?

    Next, pull together all necessary documentation. In addition to receipts and other paperwork you may have kept, you should also have tax forms that were either mailed to you or sent electronically — from your employers, brokerage firms, college, loan servicers, the state unemployment office, etc.

    You’ll need the information on these forms to fill out your tax return accurately. Keep in mind, the IRS also has a copy of these “third-party” forms that were sent to you, so its systems will flag if there is any discrepancy between what is on the form sent to you and what you put on your return.

    Most people realize what they earn at a full-time job is subject to income tax and that those taxes are automatically withheld by your employer.

    But any side hustle income you generate, or money you make as a gig worker, is also taxable, even if you’re paid in cash or via a payment app. Ditto for tips. And often tax on that type of income is not withheld. You’re just paid a gross amount and will have to set aside money to cover the taxes owed on it.

    Severance payments and unemployment benefits may be taxable too.

    And so is investment income — meaning the profits (or “capital gain”) you make on the sale of an investment or property — which is basically the price for which you sell something minus the original price you paid for it. (Also worth noting: if you have investment income, also called “passive” income, it is taxed at a lower rate than your paycheck — i.e., “earned” income — assuming you held your investment longer than a year.)

    Most dividends and interest payments are also taxable.

    And remember all that lucrative fun you had betting on the SuperBowl or spending a weekend with friends in Vegas? Yup, your winnings from gambling and sports betting are considered taxable income. (The semi-good news is if you had any gambling losses last year, they can offset your wins, so it may be that you won’t owe tax on your winnings if your losses cancel them out.)

    For many of these types of income you should have received forms from your employer (a W2 if you’re a full-time employee); from your clients if you’re a contract or gig worker (eg. a 1099-K, a 1099-NEC) or, starting next year, from the payment apps on which you get paid for your goods and services (e.g., a 1099-MISC). Meanwhile, banks and brokerage firms will send you 1099-INTs (for interest), 1099-DIVs (for dividends) and 1099-Bs (for your capital gains and losses).

    If you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, you don’t have to file a state tax return because those states don’t impose an income tax. If you live in New Hampshire and Tennessee, you won’t have to file a return for your salary and wages. But you may have to file a return if you got income from dividends and interest during the tax year.

    The standard deduction reduces your adjusted gross income. The amount for tax year 2022 is $12,950 for singles; $25,900 for married couples filing jointly; and $19,400 for heads of household (e.g., a single parent).

    “That’s the amount of money you don’t have to pay tax on,” O’Saben noted.

    The only filers who itemize their deductions are those whose deductions add up to more than the standard deduction. Itemized deductions include: charitable contributions, state and local income and property taxes, mortgage interest and casualty loss if you live in a federally declared disaster area.

    But even if you just take the standard deduction you may also take in addition what are called “above-the-line” deductions. These include up to $2,500 in student loan interest that you paid in 2022 (your student loan servicer should send you a Form 1098-E); any contributions you made to a deductible IRA or to a Health Savings Account; and, if you’re a teacher, up to $300 of what you spent on school supplies and personal protective equipment for your classroom.

    [For a fuller list of different types of taxable income (“additional income”) and above-the-line deductions (“adjustments to income”), see Schedule 1 to the federal 1040 form.]

    A tax credit is a dollar-for-dollar reduction of your tax bill and if it’s a “refundable” credit, which some are, it can actually increase your refund.

    Some credits to be aware of, especially if you’re not making a lot of income:

    The Earned Income Tax Credit: The EITC is intended to help low- and moderate-income workers (defined in 2022 as those with earned income under $59,187), and especially filers with children.

    The EITC is also available to earners without qualifying children and it’s worth $560 for 2022.

    Education credits: If you were in school last year, footed the costs and are not claimed as a dependent on anyone else’s tax return, you may be eligible for an American Opportunity Tax Credit or a Lifetime Learning Credit. To see if you qualify, here’s an IRS table comparing the eligibility requirements and the value of each of those credits. Also, check to see if your educational institution sent you a Form 1098-T, which you will need if you claim one of these credits.

    The Saver’s Credit: The Saver’s Credit is a federal match for lower-income earners’ retirement contributions for up to $2,000 a year.

    The Child Tax Credit: If you’re a parent you may claim a maximum child tax credit of $2,000 for each child through age 16 if your modified adjusted gross income is below $200,000 ($400,000 if filing jointly). Above those levels, the child tax credit starts to get reduced. And the portion of the credit treated as refundable — meaning it is paid to you even if you don’t owe any federal income tax — is capped at $1,500, and that is only available to those with earned income of at least $2,500.

    And if you paid for child care in 2022, you may be eligible to claim a dependent care credit.

    Your federal tax return is due on April 18. That is the day by which you must have filed your 2022 individual tax return and paid any remaining federal income taxes owed for last year. The only exceptions are for those who lived in federally declared disaster areas, in which case their deadlines are later.

    But anyone can apply for — and will automatically be granted — a six-month extension until October 16, 2023 to file their return if they submit Form 4868 by April 18.

    Note, though, that an extension to file is not an extension to pay if you still owe the IRS more in taxes for last year than you actually paid in 2022.

    So, unless you have good reason to believe you will receive a refund, get a ballpark estimate of what more you think you’ll owe the IRS and send in that check by April 18 if you file for an extension. Otherwise you could be hit with a late payment penalty. And that could be compounded by a failure-to-file penalty if you didn’t file on time or didn’t get an automatic filing extension.

    Sign up for CNN’s Adulthood, But Better newsletter series. Our seven-part guide has tips to help you make more informed decisions around personal finance, career, wellness and personal connections.

    [ad_2]

    Source link

  • Rubio wants to block Ford from tax breaks for using Chinese battery technology | CNN Business

    Rubio wants to block Ford from tax breaks for using Chinese battery technology | CNN Business

    [ad_1]

    US Senator Marco Rubio on Thursday introduced legislation that takes aim at Ford’s deal to use technology from Chinese battery company CATL as part of the automaker’s plan to spend $3.5 billion to build a battery plant in Michigan.

    Rubio, the top Republican on the Intelligence Committee, introduced legislation that would block tax credits for electric vehicle batteries produced using Chinese technology, saying it would “significantly restrict the eligibility of IRA tax credits and prevent Chinese companies from benefiting.”

    Ford said in response to Rubio that “making those batteries here at home is much better than continuing to rely exclusively on foreign imports, like other auto companies do. A wholly owned Ford subsidiary alone will build, own and operate this plant. No other entity will get US tax dollars for this project.”

    Last month, Rubio asked the Biden administration to review Ford’s deal to use technology from CATL.

    Rubio called for an immediate Committee on Foreign Investment in the United States (CFIUS) review of the licensing agreement between Ford and CATL.

    Rubio said the deal “will only deepen US reliance on the Chinese Communist Party for battery tech, and is likely designed to make the factory eligible for Inflation Reduction Act (IRA) tax credits.”

    CFIUS is a US Treasury-led interagency panel that reviews proposed transactions to ensure they do not harm national security.

    Treasury declined to comment, but Energy Secretary Jennifer Granholm said last month the Ford deal will “bringing advanced manufacturing capabilities from overseas to the United States is key to our competitiveness, will stimulate our economy, and create good-paying American jobs.”

    Ford has said the plant would create 2,500 jobs and begin producing lower cost and faster recharging lithium-iron-phosphate batteries in 2026.

    The $430 billion IRA imposes restrictions on battery sourcing and is designed to wean the United States off the Chinese supply chain for electric vehicles (EVs). The IRA will eventually bar credits if any EV battery components were manufactured by a “foreign entity of concern,” in a provision aimed at China.

    [ad_2]

    Source link

  • From increases in minimum wage to recreational marijuana, these new laws take effect in 2023 | CNN Politics

    From increases in minimum wage to recreational marijuana, these new laws take effect in 2023 | CNN Politics

    [ad_1]



    CNN
     — 

    As President Joe Biden scored several legislative wins last year, voters across the country headed to the polls in November to decide on local measures.

    The passage of several of those measures will lead to new state laws this year. And Americans in 2023 will also feel the impact of several provisions in the Inflation Reduction Act that was enacted over the summer.

    Here are some of the state and federal measures set to take effect in 2023.

    Nearly half of all US states will increase their minimum wages in 2023.

    The hike went into effect in the following states on January 1: Arizona, California, Colorado, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New Mexico, Ohio, Rhode Island, South Dakota, Vermont and Washington.

    Minimum-wage workers in Connecticut will have to wait until June 1 to see the increase, while the change goes into effect in Nevada and Florida on July 1 and September 30, respectively. The hike went into effect in New York on Saturday for workers outside New York City, Long Island and Westchester County.

    Of all states, Washington state has the highest minimum wage at $15.74, up from $14.49, followed by California, which now has a minimum wage of $15.50 for all workers, up from $14 for employers with 25 or less employees and $15 for employers with 26 or more employees.

    However, Washington, DC, continues to have the highest minimum wage in the country. The increase from $16.10 to $16.50 went into effect Sunday and another hike to $17 is set for July 1.

    The push for a higher wage across the country comes as the federal minimum wage has remained the same since 2009, the longest period without change since a minimum wage was established in 1938, according to the Department of Labor.

    Efforts by Democrats to pass a $15 minimum wage bill stalled in the Senate in 2021.

    Jeenah Moon/Bloomberg/Getty Images

    Five states – Arkansas, Maryland, Missouri, North Dakota and South Dakota – had recreational marijuana on the ballot in the November midterm elections, and voters in Maryland and Missouri approved personal use for those 21 and older.

    While legalization has taken effect in Missouri with an amendment to the state constitution, the Maryland law goes into effect on July 1.

    The law will also allow those previously convicted of cannabis possession and intent to distribute to apply for record expungement.

    Starting January 1, the amount of cannabis a person can possess in Maryland for a fine instead of a criminal penalty increases – from just over a third of an ounce, or 10 grams, to 2.5 ounces.

    One of the most significant victories for Biden in 2022 was the Inflation Reduction Act, a $750 billion health care, tax and climate bill, which he signed into law in August.

    As part of the legislation, the price of insulin for Medicare beneficiaries will be capped at $35 starting January 1.

    About 3.3 million Medicare beneficiaries used insulin in 2020 and spent an average of $54 per insulin prescription the same year, according to the Kaiser Family Foundation.

    The cap does not apply to those with private insurance coverage after Senate Democrats failed to get at least 10 Republican votes to pass the broader provision.

    02 new laws in 2023

    Keith Srakocic/AP

    There will be changes to the tax credits for those with electric vehicles, also thanks to the Inflation Reduction Act.

    The new rule stresses the use of vehicles that were made in North America, requiring much of their battery components and final assembly to be in the continent to be eligible for tax credits. It also mandates at least 40% of the minerals used for the battery to be extracted from the United States or a country that has free trade with the US.

    Upon meeting the requirements, new vehicles are eligible for a tax credit of up to $7,500.

    Those purchasing used electric vehicles can receive up to $4,000 in credits but it may not exceed 30% of the vehicle’s sale price.

    Initially, buyers who purchase vehicles in 2023 will need to wait to receive the tax credit when they file their tax returns for the year in 2024. But starting on January 1, 2024, electric vehicle buyers will be able to receive the money immediately, at the point of sale, if they agree to transfer the credit to their dealership.

    [ad_2]

    Source link

  • Tax credit confusion could create a rush for electric vehicles in early 2023 | CNN Business

    Tax credit confusion could create a rush for electric vehicles in early 2023 | CNN Business

    [ad_1]



    CNN
     — 

    As the new year begins, a number of popular electric vehicles, specifically some Tesla and General Motors models, could be eligible for $7,500 worth of tax credits they weren’t eligible for in 2022. But that eligibility may last only last a few months.

    That’s because limitations on new tax credits enacted in August as part of the Inflation Reduction Act won’t be put into force all at once, the Treasury Department announced this week. That means the rules will, temporarily, be more generous, allowing higher tax credits on more electric vehicles, for the first few months of the new year.

    The US Treasury Department, which is implementing the rules, recently announced that rules for some of the new restrictions on the tax credits – including around where the vehicle’s battery pack is assembled and where the minerals used in it came from – were being postponed until at least March of 2023, when it announces proposed rules around that part of the requirements. According to language in the legislation, though, just the publication of the “proposed guidance” around these rules, which Treasury said would happen in March, will immediately trigger the reductions in tax credits. But some of the new rules are taking effect as originally scheduled in January. That leaves a roughly a three-month window in which some vehicles could be eligible for much higher tax credits than they will be eligible for later on.

    General Motors, for example, has already said that once the full restrictions come into force – whenever that happens – its electric vehicles will only quality for a $3,750 tax deduction. It’s expected to be two or three years before GM vehicles can, once again, qualify for the full $7,500 tax credit, the company has said.

    While that could create a buying opportunity in the first months of the year, the downside is that it just adds to confusion around what is already a baffling set of rules – even by tax regulation standards.

    “I was kind of hoping for more clarity, not less,” said Chris Harto, a senior policy analyst with Consumer Reports. “It seems like things just seem to get more confusing each time they say something.”

    Essentially, the tax rules are designed to incentivize automakers to make their electric vehicles and all the parts of those vehicles, as much as possible, in the United States, or in countries with which the US has trade agreements. They’re also designed so tax credits don’t go to wealthy Americans buying expensive luxury vehicles. The latest announcement, which will temporarily open up more tax credit money, is likely mostly a good thing for consumers.

    The lopsided tax credit at the start of the year is just one of several potential sources of confusion.

    Under the new EV tax credit rules, the Chevrolet Bolt EV and EUV are eligible for tax credits in the new year. They had previously been ineligible because, even though they’re built in North America – one of the requirements under the new rules – General Motors, Chevrolet’s parent company, and Tesla had long ago sold more than 200,000 plug-in vehicles. That was the limit for any given manufacturer under the outgoing tax credit requirements. New rules, enacted as part of the Inflation Reduction Act, do away with that limit, though.

    Still, not every buyer and not every electric vehicle will be eligible for credits. For instance, besides the requirement that the vehicle must be built in North America, there will be restrictions on its price, too. If it’s an SUV, its sticker price must not be higher than $80,000 and, if it’s a car, not more than $55,000.

    As a result, most Tesla models, including the Model X SUV and Model S sedan and even the Model 3, as it’s currently priced on Tesla’s web site, still won’t be eligible for tax credits. And the Mercedes EQS SUV, which is assembled in the United States and is currently eligible for tax credits, according to an IRS web site, will become ineligible in the new year.

    “It shuffles the deck as to who’s eligible, and then the deck will get shuffled again when this guidance comes out [in March],” said Harto. “And it just makes a giant mess for consumers, and automakers, and dealers.”

    Also, no flipping allowed. The person purchasing the vehicle has to be the end user. If you’re purchasing the vehicle just to immediately resell it to someone else, you can’t claim the credit.

    There are also limits on the buyer’s income. The purchaser can’t have a “modified adjusted gross income” over $150,000 for an individual, $300,000 for a couple filing jointly, or $225,000 for a single head of a household. These restrictions will keep many luxury electric vehicle buyers from getting tax credits.

    The best thing vehicle shoppers can do is ask whether the specific vehicle they’re buying qualifies for a tax credit, said Andrew Koblenz, vice president for legal and regulatory affairs at the National Automobile Dealers Association. Some vehicle models are made in more than one factory, so two identical looking electric SUVs on the same dealer lot might not both qualify or might not qualify for the same amount of credit.

    “It’s a great time to be shopping. It’s great that there will be more vehicles eligible now but you’ve still got to make sure the one you’re interested in is eligible,” Koblenz said. “You need to ask your dealer and your manufacturer that question and you’ve got to make sure that you qualify, too.”

    [ad_2]

    Source link

  • White House cautiously optimistic over economy in 2023: ‘Absolutely no sign’ job growth will tumble or unemployment will spike | CNN Politics

    White House cautiously optimistic over economy in 2023: ‘Absolutely no sign’ job growth will tumble or unemployment will spike | CNN Politics

    [ad_1]



    CNN
     — 

    As Wall Street and Main Street fret about a potential recession, White House officials are projecting confidence about the economy’s ability to weather the storm in 2023.

    “We’re feeling cautiously optimistic because we are starting to see some real concrete measurable signs of progress,” Aviva Aron-Dine, deputy director of the White House National Economic Council, told CNN in a Zoom interview.

    The Biden administration economist pointed to a range of metrics showing inflation has cooled off, real wages have heated up and the job market has defied doomsday predictions.

    The White House is hoping for a soft landing, in which the Federal Reserve tames inflation without crashing the economy.

    “We remain optimistic about a transition to stable, steady growth with lower inflation – without giving up labor market gains, without a recession,” Aron-Dine said.

    So far, so good – at least from the administration’s perspective.

    For the moment, metrics suggest the economy has remained resilient and consumers are more optimistic as inflation has eased. The Conference Board’s latest consumer confidence index this month, for example, showed a significant jump from November. And after spiking to record highs in June, gas prices have plunged to 17-month lows, delivering a major boost to consumers.

    And some broader trends appear to be working in the administration’s favor, like hiring, which has slowed but has not collapsed.

    There is “absolutely no sign” that job growth will fall on a “sustained basis” below a pace of roughly 150,000 jobs a month, Aron-Dine said.

    Last month, the US economy added a surprisingly strong 263,000 jobs. That’s down sharply from 647,000 in the same period last year – but still a very healthy pace.

    Despite a series of mass layoffs in the tech and media industries, Aron-Dine added that there is “no sign of a big increase in unemployment.”

    Indeed, initial jobless claims remain very low. The Labor Department said Thursday that first-time claims for unemployment benefits rose just slightly in the latest week and remain near two-month lows. However, some economists – including ones at the Fed – warn this trend could be about to change due in large part to continued pressure from higher borrowing costs.

    After raising interest rates for a seventh meeting in a row, the Fed last week projected the unemployment rate will rise from a historically low level of 3.7% today to 4.6% by the end of next year. That implies an increase of approximately 1.6 million unemployed people.

    Some, though certainly not all, business leaders and major banks expect the US economy will slip into a downturn next year. For instance, PNC is now projecting a “mild recession” that is similar to the downturns of 1990-1991 and 2001.

    “The risk of a recession is elevated right now – certainly higher than six months or a year ago,” Gus Faucher, chief economist at PNC, told CNN. “We need to be prepared for a recession sometime in the spring or summer of 2023.”

    Other economists including Mark Zandi, the chief economist at Moody’s Analytics, are growing more confident a recession may be avoided.

    Although Fed officials say a soft landing is still possible, some of the Fed’s own metrics are flashing red.

    A New York Fed model that uses shifts in the bond market to forecast recession risks finds there is a 38% chance of a recession in the next 12 months. That narrowly surpasses the peak in 2019 and is the highest level since just before the Great Recession.

    There are signs that cracks are forming in consumer spending – the main engine of the US economy – due to high inflation that has forced some Americans to dip into savings and turn to credit cards. Retail sales declined in November by the most in nearly a year as shoppers pulled back on everything from furniture and cars to even e-commerce.

    Asked about the surprise retail sales slump, Aron-Dine noted this metric can experience significant volatility.

    “If you look at the data over a more extended period, you’re just not seeing any signs that would make us think that is a significant concern,” she said.

    In that effort to transition away from high inflation, Aron-Dine said, the White House continues to evaluate ongoing risks, calling the war in Ukraine “one of the most significant risks that we monitor.”

    “I think all year, we’ve seen that there are signs of real strength and opportunities for a successful transition, and that there are significant risks. And so our work, our strategy has been about trying to take advantage of the strengths and mitigates the risk,” she said, later adding, “I think we have reason for optimism, reasons to believe the US economy is well positioned, but there are global challenges and high on that list is potential downstream consequences of the war in Ukraine for food and energy as we saw this year and more generally.”

    Another hurdle Biden’s economic team will face in the new year will be achieving consensus among a newly divided Congress.

    Biden’s first two years in office were marked by the passage the administration’s proposed major spending bills aimed at bolstering the country’s recovery from the coronavirus pandemic, rebuilding the nation’s infrastructure, overhauling major social safety net programs, enhancing domestic supply chains and making climate investments.

    But some major provisions the Biden White House has pushed for, including the revival of the enhanced child credit have failed to move forward in Congress. The previous expansion of the child tax credit lifted 2.1 million children out of poverty in 2021, according to the Census Bureau.

    A last-ditch effort this month to pass the credit into law as part of the $1.7 trillion government spending bill failed. And with Republicans taking over the House of Representatives next year, its passage is even less likely.

    “It is a disappointment that Republicans blocked inclusion of Child Tax Credit improvements during the lame duck,” Aron-Dine said, adding, “I won’t get ahead of agenda setting our strategy for next year, but of course, this will remain a priority for us.”

    Along with broader efforts to tackle inflation and avoid a recession, the implementation of the Inflation Reduction Act will also be top of mind for Biden economic officials in the coming year.

    A slate of provisions in the IRA are scheduled to roll out in January, including home energy efficiency tax credits and a $35 cap on the cost of insulin for seniors on Medicare.

    And CNN previously reported that along with deploying a messaging strategy aimed at highlighting existing accomplishments, as Biden heads into the new year, the White House is looking to highlight ways the Inflation Reduction Act will lower everyday costs.

    Aron-Dine told CNN that the enactment of the IRA “is just going to have a huge effect in shaping our work in the year ahead, with one of our biggest priorities really being just making sure that we fully realize the potential of that law.”

    And as the administration prepares to frame Biden’s agenda ahead of the State of the Union address next year, National Economic Council Director Brian Deese told the Wall Street Journal this week that officials are considering a push for policies aimed at getting Americans back to work, including childcare and eldercare benefits.

    It’s not clear whether the White House is considering using executive authority or proposals to Congress to move forward on the initiative. Aron-Dine declined to offer specifics.

    [ad_2]

    Source link

  • Here’s what’s in the $1.7 trillion federal spending bill | CNN Politics

    Here’s what’s in the $1.7 trillion federal spending bill | CNN Politics

    [ad_1]



    CNN
     — 

    Senate leaders unveiled a $1.7 trillion year-long federal government funding bill early Tuesday morning.

    The legislation includes $772.5 billion for non-defense discretionary programs and $858 billion in defense funding, according to a bill summary from Democratic Sen. Patrick Leahy, chair of the Senate Committee on Appropriations.

    The sweeping package includes roughly $45 billion in emergency assistance to Ukraine and NATO allies, boosts in spending for disaster aid, college access, child care, mental health and food assistance, more support for the military and veterans and additional funds for the US Capitol Police, according to Leahy’s summary and one from Sen. Richard Shelby of Alabama, the top Republican on the Senate Appropriations Committee.

    However, the bill, which runs more than 4,000 pages, left out several measures that some lawmakers had fought to include. An expansion of the child tax credit, as well as multiple other corporate and individual tax breaks, did not make it into the final bill. Neither did legislation to allow cannabis companies to bank their cash reserves – known as the Safe Banking Act. Also, there was also no final resolution on where the new FBI headquarters will be located.

    The spending bill is the product of lengthy negotiations between top congressional Democrats and Republicans. Lawmakers reached a “bipartisan, bicameral framework” last week following a dispute between the two parties over how much money should be spent on non-defense domestic priorities. They worked through the weekend to craft the legislation.

    The Senate is expected to vote first to approve the deal this week and then send it to the House for approval before government funding runs out on December 23. The bill would keep the government operating through September, the end of the fiscal year.

    Congress originally passed a continuing resolution on September 30 to temporarily fund the government in fiscal year 2023, which began October 1.

    More aid for Ukraine: The spending bill would provide roughly $45 billion to help support Ukraine’s efforts to defend itself against Russia’s attack.

    About $9 billion of the funding would go to Ukraine’s military to pay for a variety of things including training, weapons, logistics support and salaries. Nearly $12 billion would be used to replenish US stocks of equipment sent to Ukraine through presidential drawdown authority.

    Also, it would provide $13 billion for economic support to the Ukrainian government.

    Other funds would address humanitarian and infrastructure needs, as well as support European Command operations.

    Emergency disaster assistance: The bill would appropriate more than $38 billion in emergency funding to help Americans in the west and southeast affected by recent natural disasters, including tornadoes, hurricanes, flooding and wildfires. It would aid farmers, provide economic development assistance for communities, repair and reconstruct federal facilities and direct money to the Federal Emergency Management Agency’s Disaster Relief Fund, among other initiatives.

    Overhaul of the electoral vote counting law: A provision in the legislation aims at making it harder to overturn a certified presidential election, in a direct response to the January 6 attack on the US Capitol.

    The changes would overhaul the 1887 Electoral Count Act, which then-President Donald Trump tried to use to overturn the 2020 election.

    The legislation would clarify the vice president’s role while overseeing the certification of the electoral result to be completely ceremonial. It also would create a set of stipulations designed to make it harder for there to be any confusion over the accurate slate of electors from each state.

    Higher maximum Pell grant awards: The bill would increase the maximum Pell grant award by $500 to $7,395 for the coming school year. This would be the largest boost since the 2009-2010 school year. About 7 million students, many from lower-income families, receive Pell grants every year to help them afford college.

    Increased support for the military and veterans: The package would fund a 4.6% pay raise for troops and a 22.4% increase in support for Veteran Administration medical care, which provides health services for 7.3 million veterans.

    It would include nearly $53 billion to address higher inflation and $2.7 billion – a 25% increase – to support critical services and housing assistance for veterans and their families.

    The bill also would allocate $5 billion for the Cost of War Toxic Exposures Fund, which provides additional funding to implement the landmark PACT Act that expands eligibility for health care services and benefits to veterans with conditions related to toxic exposure during their service.

    Beefing up nutrition assistance: The legislation would establish a permanent nationwide Summer EBT program, starting in the summer of 2024, according to Share Our Strength, an anti-hunger advocacy group. It would provide families whose children are eligible for free or reduced-price school meal with a $40 grocery benefit per child per month, indexed to inflation.

    It would also change the rules governing summer meals programs in rural areas. Children would be able to take home or receive delivery of up to 10 days worth of meals, rather than have to consume the food at a specific site and time.

    The bill would also help families who have had their food stamp benefits stolen since October 1 through what’s known as “SNAP skimming.” It would provide them with retroactive federal reimbursement of the funds, which criminals steal by attaching devices to point-of-sale machines or PIN pads to get card numbers and other information from electronic benefits transfer cards.

    More money for child care: The legislation would provide $8 billion for the Child Care and Development Block Grant, a 30% increase in funding. The grant gives financial assistance to low-income families to afford child care.

    Also, Head Start would receive nearly $12 billion, an 8.6% boost. The program helps young children from low-income families prepare for school.

    Help to pay utility bills: The bill would provide $5 billion for the Low Income Home Energy Assistance Program. Combined with the $1 billion contained in the earlier continuing resolution, this would be the largest regular appropriation for the program, according to the National Energy Assistance Directors Association. Home heating and cooling costs – and the applications for federal aid in paying the bills – have soared this year.

    Enhance retirement savings: The bill contains new retirement rules that could make it easier for Americans to accumulate retirement savings – and less costly to withdraw them. Among other things, the provisions would allow penalty-free withdrawals for some emergency expenses, let employers offer matching retirement contributions for a worker’s student loan payments and increase how much older workers may save in employer retirement plans.

    More support for the environment: The package would provide an additional $576 million for the Environmental Protection Agency, bringing its funding up to $10.1 billion. It would increase support for enforcement and compliance, as well as clean air, water and toxic chemical programs, after years of flat funding.

    It also would boost funding for the National Park Service by 6.4%, restoring 500 of the 3,000 staff positions lost over the past decade. This would be intended to help the agency handle substantial increases in visitation.

    Plus, the legislation would provide an additional 14% in funding for wildland firefighting.

    Additional funding for the US Capitol Police: The bill would provide an additional $132 million for the Capitol Police for a total of nearly $735 million. It would allow the department to hire up to 137 sworn officers and 123 support and civilian personnel, bringing the force to a projected level of 2,126 sworn officers and 567 civilians.

    It would also give $2 million to provide off-campus security for lawmakers in response to evolving and growing threats.

    Investments in homelessness prevention and affordable housing: The legislation would provide $3.6 billion for homeless assistance grants, a 13% increase. It would serve more than 1 million people experiencing homelessness.

    The package also would funnel nearly $6.4 billion to the Community Development Block Grant formula program and related local economic and community development projects that benefit low- and moderate income areas and people, an increase of almost $1.6 billion.

    Plus, it would provide $1.5 billion for the HOME Investment Partnerships Program, which would lead to the construction of nearly 10,000 new rental and homebuyer units and maintain the record investment from the last fiscal year.

    Increased health care funding: The package would provide more money for National Institutes of Health, the Centers for Disease Control and Prevention and the Assistant Secretary for Preparedness and Response. The funds are intended to speed the development of new therapies, diagnostics and preventive measures, beef up public health activities and strengthen the nation’s biosecurity by accelerating development of medical countermeasures for pandemic threats and fortifying stockpiles and supply chains for drugs, masks and other supplies.

    More resources for children’s mental health and for substance abuse: The bill would provide more funds to increase access to mental health services for children and schools. It also would invest more money to address the opioid epidemic and substance use disorder.

    Tiktok ban from federal devices: The legislation would ban TikTok, the Chinese-owned short-form video app, from federal government devices.

    Some lawmakers have raised bipartisan concerns that China’s national security laws could force TikTok – or its parent, ByteDance – to hand over the personal data of its US users. Recently, a wave of states led by Republican governors have introduced state-level restrictions on the use of TikTok on government-owned devices.

    Enhanced child tax credit: A coalition of Democratic lawmakers and consumer advocates pushed hard to extend at least one provision of the enhanced child tax credit, which was in effect last year thanks to the Democrats’ $1.9 trillion American Rescue Plan. Their priority was to make the credit more refundable so more of the lowest-income families can qualify. Nearly 19 million kids won’t receive the full $2,000 benefit this year because their parents earn too little, according to a Tax Policy Center estimate.

    New cannabis banking rules: Lawmakers considered including a provision in the spending bill that would make it easier for licensed cannabis businesses to accept credit cards – but it was left out of the legislation. Known as the Safe Banking Act, which previously passed the House, the provision would prohibit federal regulators from taking punitive measures against banks for providing services to legitimate cannabis businesses.

    Even though 47 states have legalized some form of marijuana, cannabis remains illegal on the federal level. That means financial institutions providing banking services to cannabis businesses are subject to criminal prosecution – leaving many legal growers and sellers locked out of the banking system.

    FBI headquarters: There was also no final resolution on where the new FBI headquarters will be located, a major point of contention as lawmakers from Maryland – namely House Majority Leader Steny Hoyer – pushed to bring the law enforcement agency into their state. In a deal worked through by Senate Majority Leader Chuck Schumer, the General Services Administration would be required to conduct “separate and detailed consultations” with Maryland and Virginia representatives about potential sites in each of the states, according to a Senate Democratic aide.

    [ad_2]

    Source link

  • Biden’s pick for IRS commissioner would face backlog of tax returns while gearing up for next filing season | CNN Politics

    Biden’s pick for IRS commissioner would face backlog of tax returns while gearing up for next filing season | CNN Politics

    [ad_1]



    CNN
     — 

    Even though the Internal Revenue Service has been steadily chipping away at its major backlog of tax filings, millions of individuals and businesses are still waiting for their tax returns to be fully processed and their refunds to be sent.

    Dealing with this mountain of paperwork, as well as deploying the nearly $80 billion that Congress gave the agency earlier this year, could fall to Daniel Werfel, whom President Joe Biden nominated last month to be the next IRS commissioner.

    Werfel, whose Senate confirmation hearing has yet to be scheduled, is no stranger to turmoil at the IRS. He served as acting commissioner for seven months in 2013 after his predecessor was forced to resign following the revelation that the agency targeted conservative groups seeking tax-exempt status for extra scrutiny.

    Prior to joining the IRS, Werfel worked for nearly 16 years at the White House’s Office of Management and Budget, serving as deputy controller and then federal controller. After leaving the government, he joined Boston Consulting Group, where he is a managing director and partner on the federal and public sector teams.

    “The management challenges are significant, both spending the money efficiently and wisely,” said John Koskinen, who served as IRS commissioner from 2013 to 2017. “It’ll be an interesting, but good challenge for him. I think he’s more than up to it.”

    During his time at the IRS, Werfel responded to numerous congressional investigations, the White House noted when it announced his nomination.

    If confirmed, he is expected to be called again to Capitol Hill. House Republicans, who will take charge of the chamber in January, plan to conduct multiple inquiries into the agency.

    “Will he cooperate with congressional oversight efforts, such as the pending requests related to the continuing large tax return backlog, Child Tax Credit administration, and the agency’s suspicious solicitation of millions of additional tax credit claims right before an election, among many others?” Texas Rep. Kevin Brady, the Republican leader of the House Ways and Means Committee, said when Werfel was nominated.

    The Covid-19 pandemic wreaked havoc on the IRS, which closed its offices for several months in 2020. Millions of paper returns and correspondence piled up in trailers during the shutdown.

    On top of that, Congress enacted several relief programs that were carried out by the agency in 2020 and 2021 – including three rounds of stimulus checks, a monthly child tax credit and an unemployment compensation exclusion – all of which added to the pressure on its staff.

    The agency has devoted more resources to clearing the massive backlog of paper returns and is moving more quickly than it did a year ago, National Taxpayer Advocate Erin Collins said during a Tax Policy Center panel discussion last month. But the IRS is still not where she would like it to be.

    There were still 3.2 million unprocessed individual returns as of November 25, according to the agency. Of these, 1.5 million are paper returns waiting to be reviewed and processed and 1.7 million are returns that require error correction or other special handling.

    The IRS also has 800,000 unprocessed amended individual tax returns as of late November. It could take more than 20 weeks for the filings to be processed.

    Those figures remain daunting with only a few weeks left before the agency shuts down its systems to prepare for the upcoming filing year. But they show the IRS is making progress. There were about 3 million individual paper returns and 1.3 million amended returns waiting to be processed as of October 21, Collins wrote in a blog post last month.

    As for business returns, Collins found there were more than 4 million in need of initial processing as well as several hundred thousand amended returns as of October 21.

    Plus, there are 6.3 million suspended returns, of which nearly 3 million were being reviewed for potential identity theft as of late October. And the agency has about 4.5 million pieces of correspondence awaiting processing.

    The IRS does not provide updated processing figures for business returns, correspondence or all suspended returns online.

    What’s more, the agency is only answering about one in 10 calls it receives. The rate was around 85% two decades ago.

    The IRS said it intends to be “healthy” by the end of the year, Collins wrote, but she questioned how the agency defines “healthy.”

    “Regardless of the IRS’ definition, none of the above taxpayers will see the IRS as ‘healthy’ until their return is worked,” she wrote.

    The IRS did not respond to requests for comment.

    The backlog stems in part from cuts to the agency’s budget and staffing levels over the past decade. The budget is down more than 15%, after adjusting for inflation, and staffing has shrunk to 1970s levels, former Commissioner Charles Rettig told a Senate committee earlier this year.

    The agency is already deploying part of the $80 billion in funding that it will receive over 10 years from the Democrats’ Inflation Reduction Act, which passed this summer.

    In October, the IRS announced it had hired 4,000 customer service representatives to answer phones and provide other taxpayer assistance. It said it intends to hire another 1,000 staffers by the end of the year.

    Many will be in place at the start of the 2023 tax season, and nearly all will be trained by Presidents’ Day in February, which is traditionally when the agency sees the highest call volumes.

    The IRS expects the phones to be answered at a much higher rate this upcoming season, the agency said.

    In addition, the IRS is looking to hire 700 people for its Taxpayer Assistance Centers across the country. It will be the first time in a decade that its more than 270 walk-in sites will be properly staffed, the agency said.

    While the upcoming tax filing season should be better than the last two, there are reasons for concern, said Larry Gray, national government liaison for the National Association of Tax Professionals. Since the new employees will still be learning, he questioned whether they will be as accurate or be able to answer questions as quickly as those with a few years under their belts.

    Plus, training the new hires is pulling experienced staffers away from processing the backlog.

    “We are moving in a direction to better,” said Gray. But “if you think the backlog is going to be gone, you are waking up in a dream.”

    [ad_2]

    Source link

  • White House seeks to tackle food insecurity at first hunger conference since 1969 | CNN Politics

    White House seeks to tackle food insecurity at first hunger conference since 1969 | CNN Politics

    [ad_1]



    CNN
     — 

    Groceries cost 13.5% more than they did a year ago. Nearly 25 million adults live in households where there isn’t always enough to eat. Some 40% of food banks saw increased demand this summer.

    At a time when the affordability of food is in the spotlight, the Biden administration is hosting a White House Conference on Hunger, Nutrition and Health on Wednesday with the goal of combating food insecurity and diet-related diseases.

    Overall, food insecurity has declined since former President Richard Nixon convened the first and only White House conference on food, nutrition and health in 1969, which led to nationwide expansions of the food stamp and school meals programs and the creation of the Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC, among other changes. General economic growth and the reduction in poverty have also contributed to the improvements in food security in recent decades.

    However, the Covid-19 pandemic and soaring inflation have increased the attention paid to food insecurity in the US over the past two years. The Biden administration released a 44-page playbook on Tuesday aimed at the “bold goal” of ending hunger by 2030 and increasing healthy eating and physical activity to reduce diet-related diseases.

    Among the key proposals: expand free school meals to 9 million more children by 2032; allow more people to qualify for food stamps; broaden the Summer Expanded Benefit Transfer program to more kids; increase funding for nutrition programs for senior citizens; and improve transportation to and from grocery stores and farmer’s markets, among other initiatives. Many of the efforts would need approval from Congress.

    President Joe Biden announced at the conference more than $8 billion in private and public sector commitments as part of the administration’s call to action.

    “In America, no child, no child should go to bed hungry,” Biden told those gathered at the conference Wednesday. “No parent should die of disease that can be prevented.”

    More than 100 organizations have made commitments, including hospitals and health care associations, tech companies, philanthropies and the food industry.

    At least $2.5 billion will be invested in start-up companies that are focused on solutions to hunger and food insecurity, according to the White House. More than $4 billion will be dedicated toward philanthropic efforts to improve access to nutritious food, promote healthy choices and increase physical activity.

    The President also urged Congress to make permanent the enhancement to the child tax credit, which was only in effect last year. Parents used the additional monthly funds to buy food and basic necessities, which Biden said helped cut child poverty in half and reduced food insecurity for families by 26%.

    Congress has poured billions into special pandemic assistance programs aimed at enabling struggling Americans to have enough food to feed themselves and their families – even as millions of jobs were lost in 2020.

    “That’s why it’s so consequential that at the onset of the Covid-19 recession, the combination of fiscal support to households – whether it is from the economic impact payments, unemployment insurance, refundable tax credits, enhanced SNAP benefits or pandemic EBT – all combined to prevent an increase in food insecurity over the past two years,” said Lauren Bauer, a fellow in economic studies at the Brookings Institution.

    The pandemic aid, particularly a temporary enhancement to the child tax credit, helped keep kids fed last year, Bauer and anti-hunger advocates maintain.

    Food insecurity among children fell in 2021, reversing a spike during the first year of the pandemic, according to a recent US Department of Agriculture report. Some 6.2% of households with children were unable at times to provide adequate, nutritious food for their kids last year, compared with 7.6% in 2020, the report found. Last year’s rate was not significantly different than the 2019 share.

    And the prevalence of food insecurity in the families who have kids dropped to 12.5% last year, the lowest since at least 1998, the earliest year that comparable records exist.

    But elderly Americans living alone and childless households both experienced an increase in food insecurity last year, the report found.

    Overall, the share of households contending with food insecurity remained statistically the same in 2021 as the year before.

    This lack of improvement in general food insecurity despite the surge in federal spending on food stamps, formally known as the Supplemental Nutrition Assistance Program or SNAP, is a red flag for Angela Rachidi, senior fellow in poverty studies at the American Enterprise Institute, a conservative think tank.

    “When the solution is always ‘let’s just spend more on SNAP or spend more on school lunch or WIC,’ I think that that’s not always the best use of federal dollars,” she said.

    Rachidi would like to see more of an emphasis on nutrition and healthy eating, which are among the pillars of the White House conference.

    “Many more people in the US die from diet-related disease than die from hunger,” she said, noting the health problems caused by obesity, diabetes and other conditions.

    The pandemic aid that helped keep Americans afloat has largely been exhausted, and Congress has shown little appetite to dole out more assistance – even as high inflation is squeezing many families.

    The share of people who say they live in households where there was either sometimes or often not enough to eat in the last seven days has climbed to 11.5%, according to the most recent US Census Bureau Household Pulse Survey conducted in late July and early August.

    That’s up from the 10.2% recorded by the survey in late December and early January, just after the final monthly child tax credit payment was distributed. The share had been even lower in the late summer and early fall of 2021, when the monthly installments were being sent.

    Meanwhile, shopping in the supermarket is taking a bigger bite out of people’s wallets. Egg prices have skyrocketed nearly 40% over the past year, while flour is 23% costlier. Milk and bread are up 17% and 16% respectively, while chicken is nearly 17% more expensive.

    Starting next month, it will be a little easier for those in the food stamp program to afford groceries because the annual inflation adjustment will kick in. Beneficiaries will see an increase in benefits of 12%, or an average of $26 per person, per month. This comes on top of last year’s revision to the Thrifty Food Plan, upon which benefits are based, which raised the average monthly payment by $36 per person.

    Still, the upward march in prices has driven more people to food pantries, which are also struggling to stock the shelves amid higher prices.

    Some 40% of food banks reported seeing an increase in the number of people served in July compared with June, according to a survey conducted by Feeding America, which has more than 60,000 food pantries, meal programs and partner agencies in its network. The average increase was about 10% more people. Another 40% said demand remained about level.

    Many food pantries don’t have the resources to meet this increased demand, said Claire Babineaux-Fontenot, Feeding America’s CEO, noting that she’s seen sites with nearly empty shelves but long lines out the door.

    The network provided 1.4 billion fewer meals in the fiscal year ending June 30 than the year before.

    The USDA announced earlier this month that it will provide nearly $1.5 billion in additional funding for emergency food assistance, which will help alleviate the supply shortages at food banks and pantries.

    However, Feeding America feels more should be done. It recently surveyed nearly 36,000 people for their recommendations to end hunger. Many felt that food stamp benefits should be increased and eligibility should be expanded. Nearly half felt their communities need more food pantries, grocery stores and fresh food.

    The recent infusion of federal funds will help pantries distribute more food, though it doesn’t completely close the gap. And it will take time for the supplies to arrive, Babineaux-Fontenot said.

    “Today, people are going to be looking for ways to feed themselves and their family, and there will be scarce resources for them to do that,” she said.

    [ad_2]

    Source link