I.R.S. Is Said to Delay Tax Day One Month: Live Updates

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Here’s what you need to know:

Credit…Matt Rourke/Associated Press

The stimulus money promised under the American Rescue Plan began to hit the bank accounts of many Americans on Wednesday — the first official payment date — though some financial institutions chose to make the cash available to people even before it arrived from the government.

The Treasury Department said on Wednesday that 90 million payments, totaling more than $242 billion, had already been disbursed. The majority of the payments were made by direct deposit, but Treasury had also mailed about 150,000 paper checks worth about $442 million.

Additional rounds of payments will be made in the coming weeks, including for people who will receive theirs by mail as a check or debit card. You can check the status of your payment with the Internal Revenue Service’s Get My Payment tool.

Payments top out at $1,400 per person, including children and adult dependents. To qualify for the full $1,400, a single person must have an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income must be $112,500 or less, and for married couples filing jointly, that number has to be $150,000 or below. Partial payments are available to people who earn more, but the amounts fall quickly.

The payments are calculated using the most recent information on file with the I.R.S., which could be your 2019 tax return if you haven’t yet filed for 2020.

If you’re newly eligible for a payment based on your 2020 income but haven’t yet filed your return, the law allows the Treasury Department to continue payments until September. If you don’t get one during that period, you can claim what you’re owed when you file your 2021 taxes.




Federal Reserve Will Keep Rates Near Zero

The Federal Reserve Chair, Jerome H. Powell, said on Wednesday that he expects the economy to continue improving this year but plans to keep interest rates near zero until employment increases.

Today, the FOMC kept interest rates near zero and maintained our sizable asset purchases. These measures, along with our strong guidance on interest rates, and on our balance sheet, will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete. Indicators of economic activity and employment have turned up recently. Although the sectors of the economy most adversely affected by the resurgence of the virus and by greater social distancing, remain weak. The unemployment rate remains elevated at 6.2 percent in February. This figure understates the shortfall in employment, particularly as participation in the labor market remains notably below pre-pandemic levels. As the committee reiterated in today’s policy statement, with inflation running persistently below 2 percent, we will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time, and longer-term inflation expectations remain well anchored at 2 percent. The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved.

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The Federal Reserve Chair, Jerome H. Powell, said on Wednesday that he expects the economy to continue improving this year but plans to keep interest rates near zero until employment increases.CreditCredit…Jim Wilson/The New York Times
  • The S&P 500 rose on Wednesday, recouping an early loss after the Federal Reserve’s latest projections showed that the central bank’s policymakers don’t anticipate an increase in interest rates at least until 2023.

  • Just seven officials penciled in rate increases by the end of 2023, while 11 saw that policy tool remaining on hold. The Fed is also buying $120 billion in bonds per month — $80 billion in Treasury securities, plus $40 billion in mortgage-backed debt.

  • Jerome Powell, the Fed chair, indicated on Wednesday that the Fed was not ready to even start talking about when it might reduce that support. “We’ll be carefully looking ahead,” he said. “When we see that we’re on track” then “we’ll say so, and we’ll say so well in advance of any decision to actually taper.”

  • The Fed’s inflation estimates now suggest that price gains will rise to 2.1 percent by the end of 2023, at the same time as unemployment falls further and more quickly.

  • Markets have been jittery in recent weeks. The fact that the economic outlook is improving, and concern that inflation might shoot higher, have pushed up rates on longer-term Treasury securities. That has at times caused stocks to swoon — share prices tend to fall as interest rates increase — though key indexes remain near record highs.

  • The S&P 500 rose 0.3 percent, reaching a record, while the Dow Jones industrial average rose 0.6 percent and the Nasdaq composite gained 0.4 percent.

  • The yield on 10-year Treasury notes was around 1.63 percent by Wednesday afternoon after having climbed as high as 1.69 percent before the Fed’s 2 p.m. announcement.

  • Volatility in stock markets has subsided from earlier in the month when bond yields jumped higher at a rate that took investors by surprises and caught the attention of central bank officials.

Representative Maxine Waters, the head of the House Financial Services Committee, at the second hearing on the recent market frenzy.
Credit…CNBC, via Youtube

The House Financial Services Committee’s second hearing on the January stock market frenzy surrounding GameStop again focused on the practice that had given rise to commission-free trading apps and allowed trading by individual investors to boom.

In a practice known as payment-for-order-flow, large trading operations such as Citadel Securities and Virtu Financial pay retail brokerage firms — such as Robinhood — to execute orders. The surge in retail trading has moved such firms, which long have operated in relative anonymity, into a central role in the American stock market.

The arrangement can be lucrative: The firms essentially make small profits measured in increments of pennies on such trades, but the enormous user base of commission-free brokerage firms means those tiny profits can quickly add up.

Citadel Securities, a large wholesale brokerage firm that trades a range of securities such as bonds, stocks and derivatives, says it executes 47 percent of all retail trading of U.S.-listed stocks.

But the payment-for-order-flow is “a flawed and conflict-ridden practice,” said Sal Arnuk, a co-founder of a smaller firm that trades stock on behalf of institutional investors such as pension funds.

Other witnesses called to testify at the hearing agreed that the practice should be overhauled. The system “siphons trading away from transparent exchanges, and presents significant risks to markets,” said Dennis Kelleher, president of Better Markets, an advocacy group that pushes for reforms of the financial system.

But Michael Piwowar, a former commissioner for the Securities and Exchange Commission and now executive director of the Milken Institute Center for Financial Markets, said doing away with payment-for-order-flow would change the circumstances that led to a boom in retail trading.

“We’re going to return to commission-based trading,” Mr. Piwowar said, should the practice of payment-for-order-flow be banned.

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Credit…Marie Eriel Hobro for The New York Times

People who get Covid-19 shots at thousands of Walmart and Sam’s Club stores may soon be able to verify their vaccination status at airports, schools and other locations using a health passport app on their smartphones.

The retail giant said on Wednesday that it had signed on to an international effort to provide standardized digital vaccination credentials to people. The company joins a push already backed by major health centers and tech companies including Microsoft, Oracle, Salesforce, Cerner, Epic Systems, the Mitre Corporation and the Mayo Clinic.

“Walmart is the first huge-scale administrator of vaccines that is committing to giving people a secure, verifiable record of their vaccinations,” said Paul Meyer, the chief executive of the Commons Project Foundation, a nonprofit in Geneva that has developed health passport apps. “We think many others will follow.”

Credit…Commons Project

The company said people who get Covid shots at Walmart and Sam’s Club stores will be able to use free health passport apps to verify their vaccination records and then generate smartphone codes that could allow them to board a plane or enter a sports area.

The apps include Health Pass developed by Clear, a security company that uses biometric technology to confirm people’s identities at airports, and CommonPass, developed by the Commons Project.

JetBlue and Lufthansa are already using the CommonPass app to verify passengers’ negative virus test results before they can board certain flights.

Shares of Sun Country Airlines, a low-cost carrier based in Minneapolis, jumped by more than 40 percent in its first day of trading on Wednesday, suggesting that investors are optimistic that the travel business is poised for a strong rebound this year.

The stock opened at about $33, up from the $24 the airline sold shares in its initial public offering. The airline raised about $215 million by selling more than nine million shares on Nasdaq under the symbol SNCY.

The strong interest comes after a year in which airlines lost billions of dollars because of the sharp drop in travel during the coronavirus pandemic. U.S. airlines are losing about $150 million per day as they wait for bookings to recover, according to Airlines for America, a trade group. Those losses are expected to continue through much of 2021.

In a securities filing this month, Sun Country said that it sees an opportunity to accelerate its growth after years of investing in its operations.

“We believe that these investments have positioned us to profitably grow our business in the long term following a rebound,” it said in the filing.

It is not the only airline working on an I.P.O. Frontier Airlines, the only private airline among the ten largest in the U.S., said this month that it plans to go public soon.

Sun Country sees itself as a hybrid, able to cut costs like a budget carrier while offering higher-quality services like more legroom and free drinks that travelers might expect at midrange airlines. It operates largely out of Minneapolis-Saint Paul International Airport, where it’s the second-largest operator behind Delta Air Lines, it said in the filing.

Many of Sun Country’s flights are designed to whisk northerners to warm destinations such as Orlando, Fla., Cancún, Mexico, and San Juan, P.R. To take advantage of shifting demand, its flight schedule is flexible, it said in the filing, with only 3 percent offered daily and throughout the year in 2019, compared to 67 percent for Southwest Airlines, 42 percent for Spirit Airlines and 8 percent for Frontier Airlines.

Sun Country started flying in 1983 and was sold to private equity firm Apollo Global Management in 2018. Since then, it has cut costs, redesigned its network, invested in improving its cabins, expanded add-on services and fees and launched a cargo business. As of this month, it is flying a dozen Boeing 737 cargo planes for Amazon.

The airline has also built up an offering of charter flights, a business that it said is relatively resilient during downturns. Some customers, including the Defense Department and large university sports teams continued to fly in 2020 — the airline is the primary carrier for the N.C.A.A.’s March Madness tournament — even as the public largely stayed put. Sun Country’s casino customers started flying again in June, it said.

The Treasury Department, led by Secretary Janet L. Yellen, rejected the idea that a stimulus bill provision prohibited states from cutting taxes.
Credit…Stefani Reynolds for The New York Times

The Biden administration said on Wednesday that a restriction in the $1.9 trillion economic relief law that prohibits states from using aid money to cut taxes was constitutional, pushing back against claims by Republican officials in some states who argue that the provision violates state rights.

The response came after a sharply-worded letter from 21 attorneys general, who wrote to Treasury Secretary Janet L. Yellen on Tuesday seeking clarity on a portion of the law that prevents them from using the federal funds “to either directly or indirectly offset a reduction in the net tax revenue” that comes as a result of state tax cuts.

States, which are expected to share $350 billion worth of stimulus funds, are anxiously awaiting guidance about whether the restrictions apply to the use of federal dollars to offset new tax cuts, or if it blocks them from cutting taxes for any reason, even if the cuts were in the works before the law passed.

The attorneys general called the provision “the greatest attempted invasion of state sovereignty by Congress in the history of our Republic.”

The clash between the states and the Biden administration could lead to multi-state litigation over the stimulus bill and would be the first big legal battle for a White House that is rushing to pump relief money into the economy.

The first such lawsuit was filed on Wednesday when Dave Yost, Ohio’s attorney general, filed a motion for a preliminary injunction aimed at the provision of the relief legislation that restricts states from cutting taxes. The injunction seeks to bar the federal government’s ability to enforce what Mr. Yost described as the “Tax Mandate.”

“The federal government should be encouraging states to innovate and grow business, not holding vital relief funding hostage to its preferred pro-tax policies,” Mr. Yost, a Republican, said in a statement.

Ohio is expected to receive $5.5 billion in federal relief funds. Mr. Yost said that states should not have to choose between accepting the money and maintaining their rights to cut taxes.

The Treasury Department said on Wednesday that if a state that took relief money cut taxes, that state must repay the amount of lost revenue from those cuts to the federal government.

“It is well established that Congress may establish reasonable conditions on how states should use federal funding that the states are provided,” Alexandra LaManna, a Treasury spokeswoman, said. “Those sorts of reasonable funding conditions are used all the time — and they are constitutional.”

She added: “In the American Rescue Plan, Congress has provided funds to help states manage the economic consequences of Covid-19, and gave states flexibility to use that money for pandemic relief and infrastructure investments.”

The Treasury Department rejected the idea that the provision, which was added to the relief legislation at the last minute this month, prohibited states from cutting taxes. States are free to decline the federal funds or can repay the money if they are in good enough fiscal shape to cut taxes.

“The law does not say that states cannot cut taxes at all, and it does not say that if a state cut taxes, it must pay back all of the federal funding it received,” Ms. LaManna said. “It simply instructed them not to use that money to offset net revenues lost if the state chooses to cut taxes. So if a state does cut taxes without replacing that revenue in some other way, then the state must pay back to the federal government pandemic relief funds up to the amount of the lost revenue.”

The amount of aid that a state will receive is tied to its jobless rate, and there are strict requirements to ensure that the money is used for purposes related to the coronavirus or to offset revenue that has been lost because of the health crisis. The Treasury Department plans to closely scrutinize how the money is spent.

In their letter to Ms. Yellen, the attorneys general said that if they did not receive a formal response by March 23, they would take “appropriate additional action.”

Attorney General Patrick Morrisey of West Virginia said in a statement that such action would include seeking a court ruling “that the unprecedented and micromanaging provision violates the U.S. Constitution.”

Filling up in Westwood, Mass. The International Energy Agency said gasoline consumption dropped 11 percent last year.
Credit…Steven Senne/Associated Press

The world’s thirst for gasoline may never return to pre-pandemic levels, the International Energy Agency said on Wednesday.

Greater fuel efficiency, the growing shift toward electric vehicles and changing transportation habits are expected to weigh on gasoline use in the years ahead, even as consumption recovers from last year’s 11 percent drop caused by lockdowns and other restrictions.

Fatih Birol, the agency’s executive director, has used his role to push for a shift to cleaner energy to help tackle climate change. He said at a news conference Wednesday that it would be “very unlucky” if gasoline use returned to 2019 levels.

The agency said that gasoline consumption was expected to increase strongly in emerging markets like China and India in the next few years, but that beginning in 2023 it would likely decline in the large industrialized economies.

The agency’s report, called Oil 2021 and published Wednesday, said that the pandemic had set off changes in consumer behavior and that governments were making stronger efforts to reduce carbon emissions.

Although gasoline consumption may have peaked, the report predicted that oil demand would probably increase in the coming five years, but growth would be much slower than forecast before the pandemic. In the agency’s view, oil consumption would reach 104.1 million barrels a day in 2026 compared with 99.7 million barrels a day in 2019.

Visa and Mastercard are delaying increases in the fees U.S. retailers pay when consumers use credit cards online in an effort to spare businesses additional financial hardship during the pandemic.

Both companies said the increase in so-called interchange fees would now go into effect in April 2022.

“We believe the steps we have taken and are taking today will further support the recovery and will benefit businesses and consumers alike,” Visa said in a statement.

Neither Visa nor Mastercard would comment on specific rates.

Retailers had asked both companies to postpone fee increases in recent months, hoping to avoid increased costs associated with digital purchases at a time when customers are shopping online more than ever. Senator Dick Durbin, Democrat of Illinois, and Representative Peter Welch, Democrat of Vermont, wrote a letter to Visa and Mastercard’s chief executives earlier this month asking the companies to call off the increases.

Amalgamated Bank, the New York-based lender with a history of supporting progressive causes, announced on Wednesday that it would endorse a bill calling for a federal commission to study the lingering effects of slavery — and the merits of providing reparations.

It is the first American bank to support H.R. 40. The legislation, named after the federal government’s promise to give freed families “40 acres and a mule,” was first proposed more than 30 years ago. Its current lead sponsor is Representative Sheila Jackson Lee, Democrat of Texas, and its 169 co-sponsors are all Democrats. (President Biden has endorsed forming a committee to study reparations, but he has not committed to signing the bill should Congress approve it, which isn’t assured.)

Amalgamated came to support the bill after racial justice protests last year. Lynne Fox, the lender’s chair and interim chief executive, told the DealBook newsletter that the protests convinced the bank’s leaders that they needed to address structural racism with “systemic changes” to society. The bank, which has $6 billion in assets, has previously embraced policies that it said would help reduce gun-related violence.

A bank’s support is symbolically important, according to Ms. Fox. “We acknowledge — and I think others in the financial industry need to acknowledge — the deep-rooted connections between the American financial sector and the slave economy,” she said.

Executives in the banking industry have noted that their firms’ histories have included financing slaveholders, and admitted more recently to racial discrimination against employees and customers. Lenders are under increasing pressure to promote racial equity, including by shareholders.

For her part, Ms. Fox declined to criticize other lenders directly. “We don’t see ourselves as judging other institutions’ conduct,” she said. “Talking is a good first step. We look forward to when other concrete steps are taken.”

Amalgamated has already moved to address racial equity within its walls, Ms. Fox said. Those steps include reviewing wage policies, forming an employee-led committee to review policies and practices, and providing antiracism training.

In its statement endorsing the legislation, Amalgamated pledged to do more: “We believe the commission created through H.R. 40 is an important first step towards achieving racial justice. The work shouldn’t stop there.”

BMWs on display at last year’s Bangkok auto show. The German carmaker is taking a more cautious approach to electric vehicles than some rivals.
Credit…Jorge Silva/Reuters

BMW became the latest carmaker to promote its commitment to electric vehicles Wednesday, moving up the introduction of a new electric sedan, hinting at plans for an electric Rolls-Royce, and saying that its Mini cars will run exclusively on batteries, though not until the 2030s.

BMW follows rivals like Volkswagen, General Motors and Volvo that have recently declared their intention to shift to electric vehicles. But BMW, based in Munich, is pursuing a more cautious strategy than some of the others.

Unlike Volkswagen, for example, BMW has not introduced a platform — a chassis and other components shared among numerous body styles — designed exclusively for electric propulsion. BMW models will accommodate either battery power or internal combustion engines, an approach that inevitably involves engineering compromises.

Oliver Zipse, the BMW chief executive, said the company’s strategy gave customers more choice. “Others focus on individual market segments and niches,” he said during a news conference Wednesday. “We, on the other hand, are taking a targeted approach across all market segments.”

Some analysts say BMW’s approach prevents it from fully exploiting the advantages of battery power, such as the opportunity to create roomier interiors.

BMW said Wednesday it would introduce its last new Mini with an internal combustion engine in 2025, but would continue to sell the model into the 2030s. In addition, BMW will begin selling its electric i4 BMW sedan this year, sooner than planned. Rolls-Royce, which has been owned by BMW since the late 1990s, will also offer an electric model, Mr. Zipse said, but he did not give details.

Unlike General Motors or Volvo, BMW and other German carmakers have not set a deadline to stop selling cars that run on fossil fuels. They argue that many regions lack charging stations for electric vehicles. “It is not realistic that the same technologies will prevail equally in every country at the same time,” Mr. Zipse said Wednesday.

BMW sold 2.3 million passenger cars last year, 8 percent fewer than in 2019. That is a relatively small number of vehicles compared with Volkswagen or Toyota, which sell four times that number, and could be a disadvantage as the industry goes electric.

BMW as well as Daimler will have trouble selling enough electric vehicles to justify the expense of retooling factories or developing dedicated platforms, Patrick Hummel, an auto industry analyst at UBS, said during a conference call with reporters last week.

“BMW and Daimler will not be in a position to replicate what Volkswagen is doing,” Mr. Hummel said.

  • A court in Milan on Wednesday acquitted Royal Dutch Shell, the Italian energy company Eni and several current and former executives in a corruption trial over a 2011 oil deal in Nigeria. Among the defendants in the criminal case was Eni’s chief executive, Claudio Descalzi. In a statement, Shell called the trial “a difficult learning experience.”

  • Uber will reclassify more than 70,000 drivers in Britain as workers, it said on Tuesday. The decision, which will provide the drivers a minimum wage, vacation pay and access to a pension plan, is the first time the company has agreed to classify its drivers in this way, Uber said. It comes in response to a landmark British Supreme Court decision last month that said Uber drivers were entitled to more protections. The decision represents a shift for Uber, though the move was made easier by British labor rules that offer a middle ground between freelancers and full employees that doesn’t exist in other countries.

  • Google is cutting in half its commission on developers’ first $1 million in app sales, following a similar move by Apple that is aimed at appeasing developers and regulators who accuse the companies of abusing their dominance of the smartphone industry. Google said that starting July 1, it would take 15 percent of the first $1 million developers take in from certain app sales, down from 30 percent. Google will still charge 30 percent after the first $1 million.

Author: desi123

Desi123.com is an online news portal that aims to provide the latest trendy news for Asians living in Asia and around the World.

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