Latest news with #AmericanRescuePlan
CNBC
a day ago
- Business
- CNBC
ACA marketplace health plan enrollees could face 'subsidy cliff' in 2026 — here's how to avoid it
Starting in 2026, millions of Americans could see a steep increase in the cost of marketplace health insurance — unless Congress extends a pandemic-era boost that made Affordable Care Act plan premiums more affordable. This could affect millions of Americans, including students, self-employed or contract workers and younger retirees, who buy marketplace insurance and claim the so-called premium tax credit, which makes coverage cheaper. The enhanced benefit is set to expire at the end of the year. If it does, some enrollees could face a "subsidy cliff," which eliminates the premium tax credit entirely, once income exceeds certain thresholds, financial experts say. More from Personal Finance:Trump's 'big beautiful bill' includes these key tax changes for 2025Student loan bills to double for some borrowers as Biden-era relief expiresWhat a Trump, Powell faceoff means for your money If you pass the threshold by even $1 and lose the credit, "costs could go up by hundreds of dollars a month," said certified financial planner Cathy Curtis, CEO of Curtis Financial Planning in Oakland, California. But precise income projections can be tricky, said Curtis, who is also a member of CNBC's Financial Advisor Council. The average ACA enrollee saved roughly $700, about 44%, from the enhanced premium tax credit in 2024, according to November research from the Center on Budget and Policy Priorities, a nonpartisan policy organization. Enacted in early July, President Donald Trump's "big beautiful bill" made permanent the Republicans' 2017 tax cuts. But it did not extend the enhanced ACA subsidies passed via the American Rescue Plan in 2021. It's unclear whether the GOP-controlled Congress will consider such a measure before year-end. Here is a breakdown of what to know about the premium tax credit and how to avoid the "subsidy cliff" if enhancements expire after 2025. If you're eligible for the premium tax credit, you can use it to reduce monthly ACA premiums upfront or claim the credit on your tax return. The tax break was originally for enrollees earning between 100% and 400% of the federal poverty level. But the American Rescue Plan expanded eligibility above 400%. For 2025, that threshold was $103,280 for a family of three, according to The Peterson Center on Healthcare and KFF, which are both health-care policy organizations. For 2025, more than 22 million people — about 92% of enrollees — receive premium tax credits, according to KFF. That group could be "significantly affected in 2026" if Congress doesn't extend the larger benefit, said Tommy Lucas, a CFP at Moisand Fitzgerald Tamayo in Orlando, Florida. It's important to run tax projections for 2025 and 2026 if premium tax credit changes may affect you, experts said. If you're receiving the tax break for 2025 with earnings over 400% of the federal poverty level, you could explore ways to reduce 2026 income, Lucas said. For example, you may consider accelerating 2026 income into 2025, tax-loss harvesting or claiming a deduction for health savings account contributions, he said. If the bigger premium tax credit expires for 2026, "we're going to have to monitor [income] on a pretty regular basis, at least quarterly, if not monthly" to avoid the cliff, Lucas said.
Forbes
2 days ago
- Business
- Forbes
Everything Parents Need To Know About The 2025 Child Tax Credit Changes
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. The Child Tax Credit is getting another update in 2025 under the new One Big Beautiful Bill . While it doesn't match the expanded benefits from the 2021 pandemic relief, the credit continues to provide significant support, particularly for middle-income families facing rising costs. The 2021 American Rescue Plan temporarily increased the Child Tax Credit to $3,600 per child under age 6 and $3,000 per child aged 6 to 17. It also made the credit fully refundable, allowing families who didn't owe any federal income tax to receive the full amount. Under the new policy, the credit reduces to $2,200 per child under 17—close to what it was prepandemic. While there's no extra boost like before, it's still a nice tax break. The good news? More families can now qualify for the tax credit thanks to higher income phaseout thresholds. The credit now begins to phase out at: $200,000 for single filers $400,000 for married couples filing jointly Before 2021, phaseouts kicked in at much lower levels—$75,000 and $150,000, respectively. This is a welcome change for middle-income families, especially those in high-cost areas, who may have previously phased out under the old limits. Claiming the Child Tax Credit is pretty straightforward; however, you want to make sure you include the correct forms so you don't miss out. Use IRS Form 1040 to file your federal taxes to file your federal taxes Attach Schedule 8812 , the form for the Child Tax Credit, to claim the credit , the form for the Child Tax Credit, to claim the credit File by the tax deadline, which is April 15, 2026 Before filing, make sure you meet the new requirements from the IRS, as missing or inconsistent information could hold up your credit. Here's what the IRS now looks for from the qualifying child: Age. The child must be under 17 at the end of the tax year. The child must be under 17 at the end of the tax year. Relationship. The child must be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or even a grandchild, niece or nephew. The child must be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or even a grandchild, niece or nephew. Support. You need to be primarily supporting them; the child can't provide more than half of their support during the year. You need to be primarily supporting them; the child can't provide more than half of their support during the year. Residency. To qualify, the child must have lived with you for more than half the year. To qualify, the child must have lived with you for more than half the year. Dependency. You need to claim them as a dependent on your tax return. You need to claim them as a dependent on your tax return. Filing status. The child cannot file a joint tax return with someone else unless they are seeking a refund of withheld or estimated taxes. The child cannot file a joint tax return with someone else unless they are seeking a refund of withheld or estimated taxes. Citizenship. The child must be a U.S. citizen, U.S. national, or U.S. resident alien. The child must be a U.S. citizen, U.S. national, or U.S. resident alien. Social Security number. The child needs a valid Social Security number to work, and it must be issued before your tax return is due (including any extensions). If you have unpaid federal taxes, the IRS can reduce your Child Tax Credit to cover what you owe. So, if you're behind on payments, you'll want to clear those debts before filing to avoid losing part of your credit. Even if your tax bill is low or zero, you could still receive the Child Tax Credit. Because part of the credit is refundable, families may receive up to $1,700 per child, providing crucial support regardless of tax liability. Start by gathering your paperwork. Make sure you have your child's Social Security number and any custody or relationship documents. In addition, check whether your annual income falls under the phaseout limits, so you have a better idea of what to expect. If you owe back taxes, it's best to deal with it now than put it off. If you don't owe anything, you can begin organizing your documents and preparing for tax season. And if all this feels overwhelming, getting help from a tax professional or using reliable tax software can make the process easier. Here are some of the best tax software options available. The 2025 Child Tax Credit isn't as big as the pandemic-era boost families got in 2021, but it is still a relief for many, especially middle-income households. With higher income limits, more families can get the full credit this year. That said, the IRS is enforcing stricter eligibility rules. Make sure your paperwork is in order and address any unpaid taxes that could hold up your claim.
Indianapolis Star
2 days ago
- Business
- Indianapolis Star
Tariffs will cost families $2,500 this year — but wages won't rise to help
The average American family will pay about $2,500 more this year because of tariffs. But unlike inflation, your wages won't rise to compensate. That's because tariffs work differently than inflation. Tariffs cause an increase in the price of goods, both imported and their domestic competitors. But that price increase is not technically inflation — it's worse. Here is what is actually happening. Inflation is a decline in the value of currency over time. It happens because there is too much currency in circulation. That extra money can enter the economy through a growing deficit, as happened after the 2020 CARES Act, the 2021 American Rescue Plan and — the most inflationary of these — President Trump's Big Beautiful Bill. Still, tax and spending policy alone cannot cause inflation. The Federal Reserve must also allow too much money growth. Inflation affects all goods and services, including wages. So, during this unpleasant bout of inflation, wages actually grew more than prices — at least for the average private sector worker. Tariffs work very differently. Tariffs are taxes on imports and range from 10% to 55%, depending on the country of origin, the product in question and the president's hormone level. Following the 2018 tariffs, we learned from multiple studies that American consumers paid almost all the tariffs. This was to be expected, because we're a rich country buying goods from poorer nations. We are likely to be less price sensitive than manufacturing firms in developing countries. Hence, we pay more of — or nearly all of — the tariffs. The good news is that in February, March and April, American imports spiked. In those three months alone, we bought roughly five extra months' worth of goods. Those purchases were clearly intended to beat the tariff deadlines and avoid the extra tax. That surge of imports meant that many of the goods now on store shelves and being assembled into cars, computers and washing machines were bought before the tariffs. That pre-tariff stockpile has meant that price increases have been relatively low so far. The bad news is that only $335 of that $2,500 family tariff bill has hit so far. The rest is coming as importing firms pass along their costs. The consumer price index — the main measure of inflation — rose 0.3% in the latest reading. That's modest, but it came as the Federal Reserve was successfully reducing inflation. Prices have stopped falling and are rising again. These higher prices are solely due to Trump tariffs. They are poised to worsen substantially as the stockpile of pre-tariff goods are sold by retailers or put onto cars, RVs and other American-made products. The cost of goods sold later this summer, and until tariffs are eliminated, will continue to rise. This increase in prices and the consumer price index will look, feel and taste just like inflation. Journalists and even economists will call it inflation, but it's not inflation. If it was inflation, we'd eventually see wages rising as well. But higher tariff costs don't lead to higher wages; in fact, the opposite may occur. The tariffs took the U.S. from 2.4% growth in the fourth quarter of 2024 to -0.5% in the first quarter this year. The economy continues contracting, which will reduce wage growth and maybe even reverse it. So, as prices go up, wages will decline for the average worker. We import goods to make American workers more productive. Skilled American workers focus on high-value manufacturing while importing cheaper components from abroad. When tariffs force companies to pay more for imports or make low-value parts themselves, productivity falls. That means lower wages and profits — or more job automation. In the two months of data since Trump's Liberation Day tariffs were announced, the U.S. has lost 14,000 factory jobs. The slowdown in the economy this year follows a pattern that is nearly a precise example of what economic explanations of tariffs have predicted for a half century. The price increases due to tariffs are not technically inflation. Economists have a name for rising prices during a weak economy: stagflation. It's what made the 1970s so miserable.
Economic Times
3 days ago
- Business
- Economic Times
Still waiting for a fourth stimulus cheque in July or August? Here's why that $2,000 isn't coming
Stimulus Checks: Talk of a new $2,000 stimulus cheque landing in July or August 2025 has gone viral. But as of now, neither the IRS nor the US Congress has proposed or approved such a payment. The rumour, fuelled by social media and unverified reports, has no official backing. The deadline to claim the third and final stimulus passed in April 2025. While some US states continue to issue small inflation relief cheques, there is no federal fourth stimulus in the pipeline. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads IRS and Treasury: No fourth cheque in the works Trump's DOGE plan still just a proposal Cost of living rising, relief still sparse Tired of too many ads? Remove Ads Stimulus payment scams and fake forms on the rise A quick look at past stimulus payments The first cheque, issued in March-April 2020, provided up to $1,200 for individuals and $2,400 for married couples, plus $500 per qualifying child under 17 The second cheque, sent by January 2021, was up to $600 per person and $600 per dependent The third cheque, delivered between March and December 2021, gave $1,400 per eligible individual, and $1,400 per dependent How to track refunds or missing stimulus payments Over the past week, rumours have surged online about a fourth stimulus cheque worth $2,000 supposedly coming in July or August 2025. These claims, heavily circulated on social media and through loosely sourced articles, suggest that new federal relief is on the way for struggling there is no official confirmation. Not from the Internal Revenue Service (IRS), not from the US Congress, and not from the Treasury wave of misinformation follows a 19 July article by Rick Adams, which implied that lawmakers were considering new payments due to mounting public pressure. The article stated that single filers earning less than $75,000, and married couples earning under $150,000, would qualify. It also mentioned additional amounts for dependents, with direct deposits possibly starting late 2025 or early 2026 if that 'if' remains very much draft legislation, budget allocation or public statement supports these claims. The most recent IRS update, IR-2025-75 issued on 15 July, focused on tax security and extensions. It made no mention of new stimulus been no movement from the IRS or the Treasury to suggest that another stimulus is being last round of Economic Impact Payments was part of the American Rescue Plan in 2021. That provided up to $1,400 per eligible individual. As of now, the only related payments still being processed involve the 2021 Recovery Rebate Credit, with $2.4 billion in unclaimed funds still being issued. But that process ends by January IRS confirmed in bulletin IR-2024-314 that this is not a new cheque, just money left unclaimed from the third stimulus. Congress has not passed any law approving a fourth round. And the deadline to file for the third stimulus expired on 15 April in February, Donald Trump floated the idea of a one-time $5,000 'DOGE dividend' during a summit in Miami. He tied it to projected savings from Elon Musk's Department of Government Efficiency (DOGE).Trump said, 'We are considering using part of the 20% in savings DOGE identified and giving that back to taxpayers.'That proposal, however, has gone nowhere. There's been no follow-up from Congress, no formal plan, and certainly no timeline. It remains just an idea with no structure or funding behind no denying that many Americans are feeling the pinch. Rising costs of rent, food and healthcare continue to put pressure on households, especially the elderly and low-income earners. Adams noted this in his article, and there is some factual basis to that Security's Cost-of-Living Adjustment (COLA) for 2025 aims to provide some support. But it's not keeping pace with actual inflation cited by calculated that the proposed DOGE savings of $130 billion, even if redistributed, would only amount to around $807 per taxpayer, far below the claimed $2,000. That figure also assumes full congressional approval, which has not been these rumours spread, so do the scams. Users on X (formerly Twitter) have flagged fake text messages and websites offering early access to the supposed IRS is urging caution. In a statement, it advised citizens to 'check for updates and avoid unsolicited payment requests.'It's also worth noting that some states have issued their own forms of inflation relief. These are not federal cheques, and the amounts are far example, New York sent one-time inflation cheques of $200 for individuals earning up to $75,000, and $400 for married couples earning up to $150,000. Pennsylvania, Georgia and Colorado also issued what they termed 'rebate cheques' to qualifying taxpayers or property owners. Each state uses its own put the $2,000 rumour into context by looking at the actual stimulus history:Any unclaimed stimulus payments had to be filed for via the 2021 tax return. The final deadline was 15 April 2025, with no extensions available. Even if a taxpayer requested a filing extension, that did not apply to the stimulus claim. The IRS made clear that 'any unclaimed stimulus payments become the property of the U.S. Treasury.'If you are waiting for a tax refund or think you might have missed a stimulus payment, the best step is to use the IRS's 'Where's My Refund' tool online. It updates daily and lets users track the progress of their federal return. You will need your Social Security number, filing status and the exact refund amount to access the you filed electronically with direct deposit, you can expect to see the refund in your account within 21 days. For paper filers, it might take up to eight the IRS helpline at 800-829-1954 is available for those unable to use the refunds, meanwhile, must be tracked via each state's own tax portal. For example, the Delaware Division of Taxation and the Pennsylvania Department of Revenue each have dedicated online systems.
Time of India
3 days ago
- Business
- Time of India
Still waiting for a fourth stimulus cheque in July or August? Here's why that $2,000 isn't coming
Over the past week, rumours have surged online about a fourth stimulus cheque worth $2,000 supposedly coming in July or August 2025. These claims, heavily circulated on social media and through loosely sourced articles, suggest that new federal relief is on the way for struggling Americans. But there is no official confirmation. Not from the Internal Revenue Service (IRS), not from the US Congress, and not from the Treasury Department. Explore courses from Top Institutes in Select a Course Category Finance Leadership MBA Product Management Data Analytics healthcare Design Thinking PGDM Cybersecurity CXO Degree others Artificial Intelligence Data Science Technology Healthcare Management Public Policy Data Science Others Digital Marketing Project Management Operations Management MCA Skills you'll gain: Duration: 9 Months IIM Calcutta SEPO - IIMC CFO India Starts on undefined Get Details Skills you'll gain: Duration: 7 Months S P Jain Institute of Management and Research CERT-SPJIMR Fintech & Blockchain India Starts on undefined Get Details This wave of misinformation follows a 19 July article by Rick Adams, which implied that lawmakers were considering new payments due to mounting public pressure. The article stated that single filers earning less than $75,000, and married couples earning under $150,000, would qualify. It also mentioned additional amounts for dependents, with direct deposits possibly starting late 2025 or early 2026 if approved. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play this game for 1 minute and see why everyone is addicted. Undo But that 'if' remains very much hypothetical. No draft legislation, budget allocation or public statement supports these claims. The most recent IRS update, IR-2025-75 issued on 15 July, focused on tax security and extensions. It made no mention of new stimulus efforts. Live Events IRS and Treasury: No fourth cheque in the works There's been no movement from the IRS or the Treasury to suggest that another stimulus is being prepared. The last round of Economic Impact Payments was part of the American Rescue Plan in 2021. That provided up to $1,400 per eligible individual. As of now, the only related payments still being processed involve the 2021 Recovery Rebate Credit, with $2.4 billion in unclaimed funds still being issued. But that process ends by January 2025. The IRS confirmed in bulletin IR-2024-314 that this is not a new cheque, just money left unclaimed from the third stimulus. Congress has not passed any law approving a fourth round. And the deadline to file for the third stimulus expired on 15 April 2025. Trump's DOGE plan still just a proposal Back in February, Donald Trump floated the idea of a one-time $5,000 'DOGE dividend' during a summit in Miami. He tied it to projected savings from Elon Musk's Department of Government Efficiency (DOGE). Trump said, 'We are considering using part of the 20% in savings DOGE identified and giving that back to taxpayers.' That proposal, however, has gone nowhere. There's been no follow-up from Congress, no formal plan, and certainly no timeline. It remains just an idea with no structure or funding behind it. Cost of living rising, relief still sparse There's no denying that many Americans are feeling the pinch. Rising costs of rent, food and healthcare continue to put pressure on households, especially the elderly and low-income earners. Adams noted this in his article, and there is some factual basis to that concern. Social Security's Cost-of-Living Adjustment (COLA) for 2025 aims to provide some support. But it's not keeping pace with actual inflation rates. Economists cited by calculated that the proposed DOGE savings of $130 billion, even if redistributed, would only amount to around $807 per taxpayer, far below the claimed $2,000. That figure also assumes full congressional approval, which has not been granted. Stimulus payment scams and fake forms on the rise As these rumours spread, so do the scams. Users on X (formerly Twitter) have flagged fake text messages and websites offering early access to the supposed cheque. The IRS is urging caution. In a statement, it advised citizens to 'check for updates and avoid unsolicited payment requests.' It's also worth noting that some states have issued their own forms of inflation relief. These are not federal cheques, and the amounts are far smaller. For example, New York sent one-time inflation cheques of $200 for individuals earning up to $75,000, and $400 for married couples earning up to $150,000. Pennsylvania, Georgia and Colorado also issued what they termed 'rebate cheques' to qualifying taxpayers or property owners. Each state uses its own criteria. A quick look at past stimulus payments Let's put the $2,000 rumour into context by looking at the actual stimulus history: The first cheque, issued in March-April 2020, provided up to $1,200 for individuals and $2,400 for married couples, plus $500 per qualifying child under 17 The second cheque, sent by January 2021, was up to $600 per person and $600 per dependent The third cheque, delivered between March and December 2021, gave $1,400 per eligible individual, and $1,400 per dependent Any unclaimed stimulus payments had to be filed for via the 2021 tax return. The final deadline was 15 April 2025, with no extensions available. Even if a taxpayer requested a filing extension, that did not apply to the stimulus claim. The IRS made clear that 'any unclaimed stimulus payments become the property of the U.S. Treasury.' How to track refunds or missing stimulus payments If you are waiting for a tax refund or think you might have missed a stimulus payment, the best step is to use the IRS's 'Where's My Refund' tool online. It updates daily and lets users track the progress of their federal return. You will need your Social Security number, filing status and the exact refund amount to access the tool. If you filed electronically with direct deposit, you can expect to see the refund in your account within 21 days. For paper filers, it might take up to eight weeks. Alternatively, the IRS helpline at 800-829-1954 is available for those unable to use the website. State refunds, meanwhile, must be tracked via each state's own tax portal. For example, the Delaware Division of Taxation and the Pennsylvania Department of Revenue each have dedicated online systems.
