Fourth stimulus check Updates: Social Security COLA 2022, Child Tax Credit

Fourth stimulus check live updates Social Security benefits, COLA 2022, Child Tax Credit
Fourth stimulus check live updates Social Security benefits, COLA 2022, Child Tax Credit

IRS stimulus check update: Unreported US territory residents glitch 

If you’re one of the untold number of Americans whose third stimulus check mysteriously never showed up, new details may offer clues as to why.

Some taxpayers may have been misidentified as US territory residents and mistakenly deemed ineligible to receive the payments from the Internal Revenue Service (IRS), according to people affected by the issue and correspondence seen by Fast Company. 

The misidentification was the result of a glitch that requires a manual review, some taxpayers were told by IRS representatives. Others learned of the issue only after their representatives in Congress conducted an inquiry on their behalf.

IRS warns of stimulus check scammers

The IRS has once again warned of the “continuing threat” from identity thieves looking to steal stimulus payments. Check out an extensive list of tax scams in this handy guide form the tax authority…

When is Social Security COLA 2022 expected to be announced?

Inflation in the United States has been above normal compared with the past ten years, as the economy comes surging back from the depths of the pandemic-induced economic crisis. This higher than usual inflation is especially painful for those that live on a fixed income such as Social Security beneficiaries.

Fortunately for them, the amount that the Social Security Administration pays out monthly is one of the few types of income in retirement that are adjusted for inflation. However, that doesn’t mean that the 2022 annual Cost-Of-Living-Adjustment (COLA) increase to benefits for retired and disabled Social Security recipients will be enough to patch the hole that has been gouged in household finances.

Estimates for the Social Security COLA 2022 increase

Inflation in 2021 has been at its highest level since the 1980s. Back then the COLA hit a record increasing 14.3 percent in 1980, but over the ensuing decades the increases have become more modest. The average annual COLA over the past ten years was 1.7 percent, but 2022 could be the highest since 1982 surpassing the last big spike of 5.8 percent in 2008.

Although the COLA 2022 isn’t expected to reach the 7.4 percent that was hit in 1982, the Senior Citizens League, a nonpartisan senior group, projected the COLA for 2022 will be up to 6.1 percent. If the COLA 2022 is as predicted, the new average would be $1,628.

When is Social Security COLA 2022 expected to be announced?
SPENCER PLATT AFP

Inflation in the United States has been above normal compared with the past ten years, as the economy comes surging back from the depths of the pandemic-induced economic crisis. This higher than usual inflation is especially painful for those that live on a fixed income such as Social Security beneficiaries.18.8KPep Guardiola elogia a Dani Olmo: su futuro, el Barcelona y su gran Eurocopa | Diario AS

Fortunately for them, the amount that the Social Security Administration pays out monthly is one of the few types of income in retirement that are adjusted for inflation. However, that doesn’t mean that the 2022 annual Cost-Of-Living-Adjustment (COLA) increase to benefits for retired and disabled Social Security recipients will be enough to patch the hole that has been gouged in household finances.

How is the COLA calculated?

The change in COLA, if any, is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) which are published monthly by the US Bureau of Labor Statistics. This an official measure of the monthly price change of a basket of goods and services. The Social Security Administration uses the monthly average from the third quarter, July, August and September, of the last year a COLA was determined compared to the third quarter of the current year.

The US Bureau of Labor Statistics will release the Consumer Price Index data for September 2021, the last month of the third quarter, 13 October at 8:30 am ET. Last year, the Social Security Administration released the 2021 COLA the same day shortly after that announcement. So it could be expected the final 2022 COLA will be known Wednesday 13 October 2021. However, those who don’t wish to be waiting around for the announcement can get the news sent directly to them.

Since December 2020, the Social Security Administration has made it easier for beneficiaries to receive information about the COLA. Those who use the My Social Security online service can sign up to receive a message regarding the change in COLA. To receive free notifications from the Social Security Administration, log into your account and under “Message Center Preferences” you can choose to receive an email or text with the latest information.

Estimates for the COLA 2022 increase

Inflation in 2021 has been at its highest level since the 1980s. Back then the COLA hit a record increasing 14.3 percent in 1980, but over the ensuing decades the increases have become more modest. The average annual COLA over the past ten years was 1.7 percent, but 2022 could be the highest since 1982 surpassing the last big spike of 5.8 percent in 2008.

Although the COLA 2022 isn’t expected to reach the 7.4 percent that was hit in 1982, the Senior Citizens League, a nonpartisan senior group, projected the COLA for 2022 will be up to 6.1 percent. If the COLA 2022 is as predicted, the new average would be $1,628.

The year-on-year CPI-W cooled slightly from the 6 percent in July to 5.8 percent August, even so inflation is expected to remain abnormally high before it drops back down to around 2 percent next year. So, even though for those receiving old-age and disability benefits it might not cover the price increases by the time it takes effect at the end of the year.

Pelosi determined to keep Child Tax Credit extension in new bill

President Biden faces a balancing act to keep the Democratic caucus united in the Senate, where he will likely need every single vote to pass any substantial legislation. One of the key areas of dispte has been the Child Tax Credit extension, which Sen. Manchin and Sen. Sinema argue is too expensive. House Speaker Pelosi has suggeted that they could reduce the duration of the programmes to cut the cost, without removing any features. 

When will the next Child Tax Credit payments arrive?

The latest round of child tax credit payments are set to start going out this Friday, 15 October. Recipients are set to receive $250 for each child between 6 and 17 years old, and $300 for each child under six years old.

After Friday, there will be two more of these child tax credit payments — one on 15 November, with the sixth and final check coming on 15 December.

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