On The Money: IRS chief says unemployment recipients shouldn’t file amended tax returns | GOP senator blocks bill to prevent private debt collectors from seizing stimulus checks
Happy Thursday and welcome back to On The Money, where we remain astounded by dogs. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
A quick note about stimulus checks: We’ve gotten quite a few emails from folks who receive Social Security payments that are still waiting to receive their most recent direct payments. We’re trying our best to figure out when you can expect to get them and are eager to hear from folks who might have already gotten them. For anyone wondering where their latest direct payment is, you can check the IRS’s Get My Payment tool for updates.
THE BIG DEAL—IRS chief: Unemployment recipients shouldn’t file amended tax returns: IRS Commissioner Charles Rettig said Thursday that recipients of unemployment benefits in 2020 should not be submitting amended federal tax returns during this filing season to claim a recent tax break.
“The people who filed should absolutely not file an amended return,” Rettig said at a hearing held by the House Ways and Means Committee’s oversight subcommittee.
- The $1.9 trillion coronavirus relief package President Biden signed last week includes a provision that waives taxes on the first $10,200 in unemployment compensation that people received last year, in cases of households with income of under $150,000.
- The provision applies to the 2020 tax returns that people are filing this year.
Lawmakers and tax preparers had questions about whether unemployment recipients who filed their 2020 tax returns prior to the March 11 enactment of the relief package would need to file amended tax returns in order to get the tax exemption. Rettig said he anticipates the IRS will be able to help unemployment recipients receive the tax exemption without them needing to take additional action. The Hill’s Naomi Jagoda explains here.
LEADING THE DAY
GOP senator blocks bill to prevent private debt collectors from seizing stimulus checks:
Sen. Pat Toomey (R-Pa.) on Thursday blocked legislation that would prevent private debt collectors from being able to seize stimulus checks sent out under the latest coronavirus relief bill.
Though a previous $600 payment passed in December included a protection against garnishment, the rules of reconciliation — the process Democrats used to avoid the 60-vote filibuster on the most recent bill — precluded similar language from being included into the $1.9 trillion bill.
Sens. Ron Wyden (D-Ore.) and Sherrod Brown (D-Ohio) attempted to pass legislation to shield the payments from being garnished by private debt collectors, but Toomey objected. (Under the Senate’s rules any one senator can try to set up a vote or pass a bill, but any one senator can similarly object.)
“Now Senator Brown and I wanted to include these protections in the American Rescue Plan. We wanted to include them just like was done in the December relief bill. But the problem was Senate rules don’t allow Senator Brown and I to include these protections in the American Rescue Plan,” Wyden said from the Senate floor
Toomey countered that Democrats’ decision to go was the reason they couldn’t get the language protecting the payments into the bill and that it would likely be too late to make a difference anyway. The Hill’s Jordain Carney updates us here.
Weekly jobless claims rise slightly to 770K as US marks one year of recession: Seasonally adjusted new applications for unemployment insurance totaled 770,000 last week, according to Labor Department data, rising slightly as the U.S. marked one year since the start of the coronavirus recession.
- Jobless claims rose by 45,000 in the week ending March 13 from the previous week’s revised total of 725,000.
- The number of new applicants for Pandemic Unemployment Assistance dropped sharply to 282,394 last week from 478,914 in the week ending March 6.
- Altogether, 18.2 million Americans were on some form of jobless aid in the week ending Feb. 27, roughly a year after the onset of the COVID-19 pandemic shattered the U.S. economy.
Weekly jobless claims skyrocketed during the week ending March 21, 2020, as thousands of businesses shut down to slow the spread of COVID-19. After lingering near 200,000 each week before the pandemic, weekly claims exceed 1 million from the end March until the middle of August and remain well above pre-pandemic records. I have more on how far we’ve come–and how far we have left to go–right here.
GOOD TO KNOW
- A group of Democratic senators on Thursday reintroduced legislation to create a financial transaction tax, arguing that such a tax would help to reduce economic inequality.
- On the other side of the aisle, a trio of Republican senators are rolling out legislation advocating a tougher trade stance on China.
- Senators also sparred Thursday over the role financial regulators should play in the fight against climate change as federal agencies move toward tighter requirements for major firms.
- The largest union-owned bank in the U.S. declared on Wednesday that it backs reparations for Black Americans, becoming the first major American bank to do so.
ODDS AND ENDS
- The Federal Communications Commission (FCC) issued a record-setting $225 million fine to two men accused of making robocalls to sell fraudulent insurance plans this week.
- Amazon has begun testing its electric delivery vans in San Francisco, calling it the latest move toward its pledge to significantly reduce carbon emissions.
- Subscriptions to online video services reached over 1 billion for the first time ever during the coronavirus pandemic, an industry trade group found.