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Some tax professionals are urging clients to consider opting out of receiving new monthly payments of the child tax credit because they could end up having to pay back that money next filing season. The American Rescue Plan enacted in March increased the benefit for 2021 and directed the IRS to deliver half of the amount that families are eligible for in checks beginning in July. The payments are worth up to $300 per month for each child under age 6, and up to $250 for each child ages 6 to 17. Normally, parents would claim the credit as a lump sum on their annual tax returns - in this case, the ones filed next year - lowering their overall tax bill or resulting in a refund. Phyllis Jo Kubey, an enrolled agent in New York City, said she is urging clients who are eligible for the payments to opt out. She said she’d only consider advising clients otherwise if they’re experiencing financial hardship and really need the money now. While the IRS is using older income information to deliver the monthly payments, the credit owed is ultimately determined by 2021 income and will have to be reconciled on next year’s tax return. That means individuals who got a new job or received a raise in 2021 may find themselves owing money to the government if their monthly payment was too high, tax professionals warn. “That’s going to trip people up because they’re expecting, ‘Well, if the government gave it to me, I don’t have to give it back,’” said Eric Pierre, a CPA with offices in Austin, San Diego & Los Angeles.

 

Bloomberg Law

New Jersey residents would get a number of tax benefits under an agreement the state's Democratic governor and Legislature unveiled on Monday. Gov. Phil Murphy, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin said Monday they had reached a deal on what they're calling tax relief measures as part of the fiscal year 2022 budget. Checks of up to $500 will be mailed to families up to $150,000 for joint filers or up to $75,000 for those filing individually. To be eligible, filers must also have at least one dependent child. The amount of the rebate is the amount of taxes paid, but capped at $500. The rebate will go to an estimated 760,000 families. New Jersey has also been calculating property tax rebates for seniors and the disabled using 2006 data. Under the plan, this will be updated to 2017, which the governor says is the most recently available. The change will increase the average benefit for seniors and disabled homeowners by over $130, according to the governor. Low-income property owners who qualify will see an average increase of $145. The agreement will also use $15m to expand a property tax deduction for veterans, though it's unclear how the new benefit will be applied.

 

New Jersey Herald

NJ.com

US News and World Reportq

Companies in certain industries received more auditor warnings about their ability to stay afloat over the past year, compared with the previous period, as the coronavirus pandemic put finance chiefs and balance sheets under pressure. These warnings, also called going-concern opinions, are published in the annual reports of public companies and refer to their likelihood to remain in business for the next 12 months. Even though going-concern filings at U.S. public companies overall declined during the 12 months ended May 31st, they rose in certain industries, such as real estate and transportation. The percentage of these filings increased in three industry sectors, which are categorized based on codes some U.S. government agencies use: construction; finance, insurance and real estate; and transportation, communication, electric and gas. Going-concern opinions for these three segments rose to 10.7%, 8.3% and 13.5%, respectively, up 1.1, 1.8 and 0.3 percentage points compared with the prior-year period, according to data provider MyLogIQ.

 

Wall Street Journal

Federal Reserve Chairman Jerome Powell said Monday that job growth should pick up in coming months and temporary inflation pressures should ease as the economy continues to recover from the effects of the pandemic. In testimony prepared for delivery to Congress today, he said the economy has shown "sustained improvement," noting progress on vaccinations and vast stimulus efforts by Congress and the Fed. Mr. Powell said the lending programs “helped unlock more than $2tn of funding” that reduced job losses at businesses, nonprofits and local governments. The central bank leader also highlighted rising inflation pressures that he expects to lessen over time.

 

CNBC	Wall Street Journal

The world’s financial leaders will endorse on July 9-10 a deal setting a global minimum corporate tax and call for technical work to be finished so they can approve the framework for implementation in October, according to a draft G20 communique. “After many years of discussions and building on the progress made last year, we have achieved an historical agreement on a new, fair and stable international tax architecture,” the draft said. It made no mention of a specific rate for a global minimum corporate tax nor other key details, which remain to be agreed by nearly 140 countries known as the Inclusive Framework meeting online next week in talks hosted by the OECD. “We endorse the core elements of the two pillars on the profit reallocation of multinational enterprises and the global minimum tax as set out in the statement released by the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS),” the G20 draft said in anticipation of those talks.

 

Metro U.S.

The IMF is urging Latin America governments to make the rich pay “much more” in tax, saying the move was essential for development in the world’s most unequal region. 

 

Financial Times

The New York Times analyzes the tax returns of Boaz Weinstein, the multimillionaire hedge fund manager famous for betting against the JPMorgan Chase trader known as the “London Whale.” The mogul offered his filings to the paper; he and and his wife  paid $86.3m in federal taxes and $37.7m in New York State and city taxes, for a total of $124m. The couple’s adjusted gross income during the same period was $288.9m; their taxable income was $246m, lowered in part by $29.5m in philanthropic gifts.

 

New York Times