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Educational

Beware Stimulus and Tax Scams

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It’s stimulus season and tax season at once, and scammers couldn’t be happier. They know that taxpayers are eager to get their hands on their stimulus payments and tax refunds. As consumers are working to file their taxes before the May 17 deadline, all that paperwork and payments mean people may be letting their guard down. For a scammer, nothing could be better!

The IRS is warning of a surge in scams as the tax agency continues processing tax returns and distributing stimulus payments to eligible adults who have not yet received them. Here’s all you need to know about the latest round of stimulus and tax scams:

How the scams play out

In the most recent IRS-related scams, scammers will con victims into filing phony tax returns, steal tax refunds or stimulus payments or impersonate the IRS to get victims to sign documents or share personal information, such as Social Security numbers or checking account numbers. The scams are pulled off via email, text message or phone. Sometimes, victims will be directed to another (bogus) website where their device will be infected with malware. Other times, the victim receives a 1099-G tax form for unemployment benefits they never claimed or received, because someone has filed for unemployment under their name. Unfortunately, the losses incurred through most of these scams can be difficult or impossible to recover.

What you need to know

As always, information is your best protection against these scams. Here’s what you need to know about the IRS, the stimulus payments and tax returns:

  • The IRS will never initiate contact by phone or email. If there is an issue with your taxes or stimulus payment, the agency will first communicate via mail.
  • There is no “processing fee” you need to pay before you can receive your stimulus payment or tax refund.
  • The IRS is not sending out text messages about the stimulus payments. If you receive a text message claiming you have a pending stimulus payment, it’s from a scammer.
  • There is no need to take any action to receive your stimulus payment. Likewise, aside from filing your tax return, there is nothing additional you need to do to receive your tax refund.

If you’ve been targeted

If you receive a suspicious phone call, text message or email that has allegedly been sent by the IRS, do not engage with the scammer. Block the number on your phone and mark the email as spam.

If you are a victim

If you are the victim of identity theft related to taxes or stimulus payments, there are steps you can take to mitigate the loss.

If you received a 1099-G for unemployment benefits you’ve never filed for or received, it’s best not to ignore it. Contact your state’s unemployment office to report the fraud. It should be able to send you a corrected 1099-G showing you did not get any benefits.

First, report the scam to the correct authorities. If a fraudulent tax return was filed in your name, the IRS will mail you a Letter 4883C or 6330C to verify your identity. You may also need to call the toll-free number provided on the letter and visit an IRS Taxpayer Assistance Center . After reporting the fraud, you’ll likely need to file a paper tax return. Complete an Identity Theft Affidavit (Form 14039) and attach it to the back of your paper return.

If you’ve mistakenly shared your information with a scammer and they’ve stolen your stimulus check, you will likewise need to let the IRS know. Visit Identitytheft.gov where you will receive a personal recovery plan that will hopefully minimize the damage done by the scammer and help you reclaim your lost funds.

It’s tax season and stimulus season, so it’s also scam season! Keep your guard up and follow the tips outlined here to prevent yourself from falling victim to one of the many circulating scams. Stay safe!

USAgencies Credit Union will never contact you to ask for any personal or account information, when in doubt, connect with us at (503) 275-0300 or toll-free (800) 452-0915.

Educational

All You Need to Know About the New Stimulus Bill

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On March 6, the Senate passed the $1.9 trillion American Rescue Plan. The coronavirus relief bill now goes back to the House of Representatives, which must approve the Senate’s changes, before the president can sign it into law. The bill promises further financial relief and assistance to millions of Americans who may still be struggling with the financial devastation of COVID-19.

Below, we’ve outlined some of the most significant measures included in the bill:

Stimulus payments

The third round of stimulus checks are set at $1,400 for all eligible recipients. Here’s who is getting checks:

  • Single taxpayers with an adjusted gross income (AGI) of $75,000 or below.
  • Taxpayers filing as heads of household with AGIs of $112,500 or below.
  • Married couples filing jointly with AGIs of $150,000 or below.

Parents will also be getting checks for every child they claim as a dependent on their tax return. This includes college students and adult children with disabilities.

Older relatives living together with taxpayers will also be counted as dependents; the payment will go toward the taxpayer and not toward the dependent adult.

Higher earners will receive partial payments, but these will phase out quickly. For single filers, the amount decreases to zero at an AGI of $80,000. For heads of household, the checks stop at AGIs of $120,000, and for joint filers, the cutoff is $160,000.

Eligibility will be based on the taxpayer’s income during the year of their most recently filed taxes: 2019, or 2020. To be eligible for a payment, an individual must have a Social Security number.

As during the last two rounds of stimulus payments, information on the status of individual checks can be found through the IRS’s Get My Payment tool.

Also like the prior rounds, payments issued through direct deposit will be distributed first. You can still share your account information with the IRS here.

Changes to unemployment insurance

The relief bill will extend unemployment benefits for another 25 weeks, until Sept. 6. The weekly supplemental benefit of $300 will continue running through that date as well.

The new legislation will also make the first $10,200 of benefits tax-free for people with an income of less than $150,000. This only applies to unemployment paid in 2020.

In addition, unemployment benefits received through the Pandemic Unemployment Assistance (PUA)  program, which covers self-employed, gig workers, part-timers and others who are usually ineligible for regular unemployment benefits, will now be available for a total of 79 weeks and run through Sept. 6.

Finally, benefits received through the Pandemic Emergency Unemployment Compensation
(PUAC) program would also run through Sept. 6.

Health insurance

Under the relief bill, buying insurance through the government program, COBRA, will be a lot more affordable. Usually, the insured must pay a minimum of 102 percent of the premium of insurance secured through COBRA; however, the government will pay the entire COBRA premium from April 1 through Sept. 30.

Changes to the child and dependent care tax credit

The bill will expand the child and dependent-care tax credit significantly, but only for one year. The credit, which helps families offset the cost of caring for children under age 13 and other dependents, will now be fully refundable and worth up to $4,000 for one qualifying individual or $8,000 for two or more. The credit is calculated by taking up to 50 percent of the value of eligible expenses, up to certain limits and depending on your income. The credit is currently worth between 20 and 35 percent of eligible expenses, with a maximum value of $2,100 for two or more qualifying individuals.

The bill would also increase the income level at which the credit begins to be reduced from the current AGI limit of $15,000 to an AGI of $125,000.

Changes to the child tax credit

Another significant component of the relief bill is the expansion of the child tax credit. The credit is currently worth up to $2,000 per eligible child. That credit will now increase to $3,000 for children ages 6 through 17, and to $3,600 for children ages 5 and under. Also, the credit will now be fully refundable.

In addition, the bill changes the way these funds will be distributed: Half of the child tax credit may be advanced to parents before the end of 2021. Plans for the distribution are still being finalized, but lawmakers are hopeful that parents will begin receiving monthly payments toward their child tax credits for 2021 as early as July.

The bill will also change eligibility requirements for child tax credits. Payments will be based on 2019 or 2020 tax information. Married couples with a modified AGI of up to $150,000 for the relevant year (or up to $112,500 for heads of household and up to $75,000 for single filers) would receive the full value of the new benefit. After that, the beefed-up benefits would be reduced by $50 for each additional $1,000 in modified AGI.

Housing

The bill would provide billions of dollars in rental and utility assistance to people who are struggling with their housing costs and are under risk of being evicted from their homes.

Approximately $27 billion would go toward emergency rental assistance; the majority of these funds will be used to replenish the Coronavirus Relief Fund. In addition, the bill would provide nearly $10 billion to help homeowners who are struggling with mortgage payments, utility bills and other housing costs. Approximately $100 million would be dedicated to housing counseling and another $5 billion would be designated to help the homeless.

Changes to student loans

Under the new law, there would be no income tax on forgiven debt for those qualifying for loan forgiveness or cancellation, such as those who have been in an income-driven repayment plan for the required number of years. This would apply to all debt forgiven between Jan. 1, 2021 and Dec. 31, 2025.

The most recent coronavirus relief bill is both ambitious and comprehensive. Referencing these guidelines, you can learn all about the American Rescue Plan and better know what to expect going forward.

If you need further assistance, don’t hesitate to connect with us at 503.275.0300 or info@usacu.org. We’ll be happy to help you maintain financial stability during these uncertain times.

Educational

Second Wave of Stimulus Checks Brings More Scams

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The second wave of stimulus checks only started hitting checking accounts a few weeks ago, and the BBB  and the FTC are already warning of related scams.

According to the FTC, American taxpayers lost more than $211 million due to COVID-19 scams, with $20.9 million of that amount connected to the first round of stimulus checks.

Don’t get scammed! Protect yourself by learning all about these scams so you know when you’re being targeted.

How the scams play out

Stimulus check scams can take the form of phishing scams, in which a criminal asks victims to provide personal information to receive their check, and then instead uses that information to empty the victim’s account.

In other variants of the stimulus check scam, a victim receives an email prompting them to download an embedded link to receive their check.The link, of course, will infect the victim’s computer with malware.

In yet another stimulus check scam, a criminal impersonates an IRS official or a representative of another government office demanding a processing fee before the check can be sent.

Finally, there have been reports of taxpayers receiving checks that appear to be authentic stimulus checks, but are actually fraudulent. They deposit the check and, soon afterward, a scammer reaches out to them to inform them the check amount was incorrect and they must return some of the funds. Unfortunately, a few days later, the financial institution finds that the check is fake and it will not clear. The victim is now out the money they returned to the “IRS.”

Red flags

Unfortunately, technology has made it easy for scammers to spoof a Caller ID and to create bogus websites that look authentic. If you know what to look for, you can beat them at their game and recognize a scam before it gets past the first step.

Here are five red flags of stimulus check scams:

1. Unsolicited calls or emails

It’s best to avoid answering unsolicited calls and/or emails from unknown contacts to protect yourself from a stimulus check scam. Similarly, never click on a link in an unsolicited email or text message, as it may contain malware.

According to the BBB Scam Tracker, scammers have also been contacting people through robocalls and leaving messages about the stimulus checks and direct deposits. These calls should likewise be ignored.

2. Messages that ask you to verify or provide sensitive information

The BBB is warning of emails and text messages asking citizens to verify or supply information to receive their stimulus checks. Sometimes, the victim will receive an email instructing them to click on a link to receive their benefit payments. This, too, is a scam. The IRS will not call, text or email any taxpayer to verify their information.

3. High-pressure tactics

If a phone call or email demands immediate action on your part and uses a threat of losing your stimulus payment, you’re likely looking at a scam. There is no action you need to take to receive your check.

4. Fee solicitations

There is no processing fee or any other charge attached to the stimulus payments.

“If you do answer a call, and it’s about your stimulus payment, keep in mind that U.S. government agencies won’t ask you to pay anything up front to receive your funds. Anyone who does is a scammer,” cautions Jennifer Leach, associate director for the FTC’s division of consumer and business education.

There’s also no way to pay extra for receiving your stimulus payment earlier.

5. Inflated check amount

“We’ve seen a lot of scams involving bogus checks that look like government checks in the past year,” says Paige Schaffer, CEO of global identity and cyber protection services at Generali Global Assistance.

For the best way to protect yourself from this scam, the BBB recommends that all taxpayers receiving their stimulus payment via paper check verify that the check is authentic before depositing it in their checking account. Look up the agency or organization that allegedly sent the check to see if it really exists, and check the status of your payment to see if you actually should have received it.

Stay safe!

Educational

Will I Be Getting a Second Stimulus Check?

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After eight months of negotiations, the Senate has finally passed a bipartisan deal on a new coronavirus stimulus plan. The $900 billion economic relief package will deliver emergency aid to a trampled economy and provide struggling Americans with desperately needed funds.

The bill will put $325 billion toward business relief in an effort to revive strained corporations around the country. Specifically, an approximate $275 billion will fund the depleted Paycheck Protection Program, which now includes loans made available from small lenders. Another $20 billion will be directed toward small business grants and $15 billion will go toward live event venues.

Another crucial component of the stimulus bill is the boost in unemployment insurance. The bill adds a $300 federal unemployment supplement and extends pandemic-era programs that expand eligibility for unemployment.

The legislation also designates $82 billion for schools, $45 billion for transportation needs, $25 billion in rental assistance, $20 billion for vaccine distribution and $13 billion for a significant expansion of food assistance benefits.

Most Americans are primarily concerned with just one part of the bill: the second round of stimulus checks, or Economic Impact Payments (EIP).

Here’s all you need to know about the second stimulus checks:

Who qualifies for a stimulus check?

The $600 payments will be distributed to eligible recipients based on their 2019 tax returns as follows:

  • Each adult who earned $75,000 or less will receive a stimulus check of $600.
  • Married individuals filing jointly who earned $150,000 or less will each receive a stimulus check of $600.
  • Heads of households earning up to $112,500 will receive up to $600.
  • Parents and legal guardians will receive a $600 check for each dependent under age 17.
  • Adults who earned more than $75,000, married individuals filing jointly who earned more than $150,000 and heads of households who earned more than $112,500 will have their payout reduced by $5 for every additional $100 of income.

 Who does not qualify for a stimulus check?

  • Adults who earned $87,000 or more, married couples filing jointly who earned $174,000 or more and heads of households who earned $124,500 or more are not eligible for the EIPs.
  • Adults who are claimed as dependents will not be eligible for the EIPs.
  • Undocumented immigrants will not be eligible for a direct payment; however, households in which one parent has legal residency and another does not are eligible to receive the checks.

What if I didn’t file a tax return for 2019?

If you have not filed a tax return for 2019, you’ll need to complete this form to receive the stimulus payment.

When will I get my check?

The distribution of these payments is expected to be a lot quicker than the first EIPs back in the spring. On Monday, Dec. 21, Secretary of the Treasury Steven Mnuchin promised that millions of Americans would begin receiving their payments as early as the following week.

Most individuals and couples who have filed taxes for 2019 will receive their checks first via direct deposit into their accounts. Those who have not yet filed taxes for 2019 will receive their EIP in the mail, via paper check or prepaid debit card. This process may take up to five months.

If you’ve filed taxes already but the IRS does not have your account information, you may have to wait a while to receive your payment. If you’d rather get it sooner than later, you can use this link to securely share your account information with the IRS and receive your payment via direct deposit.

For those receiving their EIPs in the mail, expect the first round of payments to go to those earning less than $20,000 a year. The next round will go toward those in the next income bracket, in ascending order until all eligible individuals and couples have received their funds.

Wondering how big your second stimulus check will be? You can use one of the many online calculators to determine your amount by entering details like your income, filing status and the number of dependents you have.

Let’s hope the new infusion of funds will help the economy bounce back and regain some of the financial losses incurred during COVID-19.

If you need further assistance, don’t hesitate to connect with us at 503.275.0300 or info@usacu.org. We’ll be happy to help you maintain financial stability during these uncertain times.