In times of crisis, it is inspiring to see individuals and organizations of all types reaching out to help those in need. Unfortunately, it is equally troubling to be reminded of the lengths some people will go to try to take advantage of those who are looking for help. I’m referring to specifically to mortgage modification scammers, who are in the business of duping struggling homeowners with fraudulent promises of financial assistance with refinancing mortgages.
The scammers prey on homeowners who are in danger of defaulting, by using official-sounding names to make folks think they are taking advantage of President Obama’s promise to refinance or modify 7 to 9 million mortgages. Companies advertising these services are often fraudulent, going so far as to try to mimic the actual mortgage lender in mailings they send to homeowners who are at risk of defaulting. Anyone using their services is at risk of losing their savings or their homes.
The good news is that the government seems committed to cracking down on these scammers. They have sent warning letters to 71 companies who were running suspicious advertisements, and are currently investigating 2100 mortgage fraud cases. "We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar," says Treasury Secretary Timothy Geitner. Here’s hoping the government’s active stance against these scammers shuts down or discourages fraudulent companies. Until then, let’s extend our own helping hand by warning friends, families, and neighbors about the risk, and make sure no one we know is taken advantage of by these ruthless frauds.
Wednesday, April 15, 2009
Tuesday, April 7, 2009
Unemployment and the Stimulus Plan
A recent article on National Public Radio (NPR) notes that the unemployment rate has reached 8.5%, the highest it has been since 1983. In the month of January, 741,000 people lost their jobs, the largest number of layoffs in a single month since October of 1949. With numbers like these, it can cause a bit of head-scratching to hear that governors in some states are refusing stimulus money included in the American Recovery and Reinvestment Act which provides substantial financial incentives to states that reform their unemployment benefits programs.
What specific reforms are required for a state to receive funding? In order to receive one-third of the funding, states must implement an “alternative base period” policy, which would take into account more recent wages in determining eligibility. Many states currently don’t count the most recent three months of earnings in determining if a worker is eligible. According to a briefing from the National Employment Law Project, over 40% of workers who fail to qualify for benefits because of insufficient wages would qualify under the “alternative base period” policy. There seems to be little objection to implementing this policy.
However, in order to qualify for the additional two-thirds of funding, states are required to implement policies that have proven more controversial in the eyes of some governors.
States would have to extend benefits to two of four potential groups in order to qualify: 1) part-time workers; 2) workers who leave work for compelling family reasons, such as illness or disability of a family member, domestic violence, or moving to accompany a spouse after a job change; 3) workers who have exhausted their benefits as a result of long-term unemployment, and who are enrolled in an approved job training program; 4) workers with dependents, who are receiving benefits, but whose benefits would be increased to help them care for their families.
The governors who are rejecting the additional two-thirds of funding seem to be doing so primarily because they believe expanding unemployment insurance will create a future tax burden on businesses when the federal funding runs out. The National Employment Law Project has responded with a press release entitled “Get The Facts Straight Governors”. In it, the NELP makes several points important points regarding the governors’ refusal of funding.
First, there is no requirement in the bill that the States make the expansions permanent. If they find the changes to be too costly in the future, they can repeal the expansions. Second, some states are at risk of dropping below the minimum level of the funds required in their unemployment trust funds. If this happens, those states will be forced to raise taxes on businesses to return the fund to the minimum required level. Therefore, considering the rising numbers of unemployment insurance claims, refusing to accept stimulus money may mean higher taxes. Also, the federal funding would cover the cost of the expansion for several years (up to 66 for some states). That would give states a buffer period to both evaluate the expansion and work to find reforms that would not require increased business taxes.
The expansion of unemployment insurance is intended to help a greater number of people through this economic crisis, during a time of high job loss and weak job market. Governors who choose to protect businesses from potential, future tax increases, instead of expanding unemployment benefits to those who are in need right now seem to missing the point regarding who truly needs protection now.
What specific reforms are required for a state to receive funding? In order to receive one-third of the funding, states must implement an “alternative base period” policy, which would take into account more recent wages in determining eligibility. Many states currently don’t count the most recent three months of earnings in determining if a worker is eligible. According to a briefing from the National Employment Law Project, over 40% of workers who fail to qualify for benefits because of insufficient wages would qualify under the “alternative base period” policy. There seems to be little objection to implementing this policy.
However, in order to qualify for the additional two-thirds of funding, states are required to implement policies that have proven more controversial in the eyes of some governors.
States would have to extend benefits to two of four potential groups in order to qualify: 1) part-time workers; 2) workers who leave work for compelling family reasons, such as illness or disability of a family member, domestic violence, or moving to accompany a spouse after a job change; 3) workers who have exhausted their benefits as a result of long-term unemployment, and who are enrolled in an approved job training program; 4) workers with dependents, who are receiving benefits, but whose benefits would be increased to help them care for their families.
The governors who are rejecting the additional two-thirds of funding seem to be doing so primarily because they believe expanding unemployment insurance will create a future tax burden on businesses when the federal funding runs out. The National Employment Law Project has responded with a press release entitled “Get The Facts Straight Governors”. In it, the NELP makes several points important points regarding the governors’ refusal of funding.
First, there is no requirement in the bill that the States make the expansions permanent. If they find the changes to be too costly in the future, they can repeal the expansions. Second, some states are at risk of dropping below the minimum level of the funds required in their unemployment trust funds. If this happens, those states will be forced to raise taxes on businesses to return the fund to the minimum required level. Therefore, considering the rising numbers of unemployment insurance claims, refusing to accept stimulus money may mean higher taxes. Also, the federal funding would cover the cost of the expansion for several years (up to 66 for some states). That would give states a buffer period to both evaluate the expansion and work to find reforms that would not require increased business taxes.
The expansion of unemployment insurance is intended to help a greater number of people through this economic crisis, during a time of high job loss and weak job market. Governors who choose to protect businesses from potential, future tax increases, instead of expanding unemployment benefits to those who are in need right now seem to missing the point regarding who truly needs protection now.
- Brian Gilmore, AmeriCorps VISTA
Wednesday, April 1, 2009
Over $2.5 million with two weeks to go!
With only two weeks left in our “Give Paychecks a Boost” campaign, Just Harvest tax preparers have completed over 1200 Federal tax returns free of charge, with clients receiving over $2.5 million dollars in refunds! The Earned Income Tax Credit (EITC) is responsible for over half of the refund amount, “making work pay” for hundreds of Just Harvest’s tax clients. These impressive numbers would not be possible with the hard work and dedication of our tax preparers and volunteers, who have logged over 1800 paid and 650 volunteer hours of service. Thanks to everyone who has supported us and made this campaign a resounding success, and a tremendous economic benefit to both low- and middle-income workers and to the Greater Pittsburgh region as a whole. And for those last minute filers, we still have some appointments available. Call 412-431-8964 for more information, or to set up an appointment.
Thursday, March 26, 2009
State service providers down to bare bones
Who is going to deliver all the important services, when there are no more workers left?
We’re glad Gov. Rendell has additional funds to help vulnerable Pennsylvanians who are losing their jobs, but he MUST provide enough staff to deliver these critical services.
The number of people receiving food stamp benefits is the highest in decades. And our governor is providing more funds for the needy adults who need basic medical care.
But nobody’s asking: "How will these services get to the people who need them?" Rendell has frozen hiring.
In Pennsylvania the staff numbers in the Dept. of Public Welfare-- which administers Medicaid, food stamps and cash assistance to the most needy of our neighbors—is way down.
The staff complement for these workers in Allegheny County alone, is about 400 employees.
They are down to 320 workers now, and people are retiring every day. By June, they expect 120 more to retire! The state has a hiring freeze, and people who need the help are not receiving it in a timely manner.
So ask Gov. Rendell, "Who will deliver these services when there is no more staff in the government?"
We’re glad Gov. Rendell has additional funds to help vulnerable Pennsylvanians who are losing their jobs, but he MUST provide enough staff to deliver these critical services.
The number of people receiving food stamp benefits is the highest in decades. And our governor is providing more funds for the needy adults who need basic medical care.
But nobody’s asking: "How will these services get to the people who need them?" Rendell has frozen hiring.
In Pennsylvania the staff numbers in the Dept. of Public Welfare-- which administers Medicaid, food stamps and cash assistance to the most needy of our neighbors—is way down.
The staff complement for these workers in Allegheny County alone, is about 400 employees.
They are down to 320 workers now, and people are retiring every day. By June, they expect 120 more to retire! The state has a hiring freeze, and people who need the help are not receiving it in a timely manner.
So ask Gov. Rendell, "Who will deliver these services when there is no more staff in the government?"
- Joni Rabinowitz, Co-Director
Taxes and Obama’s stimulus plan
The American Recovery and Reinvestment Act of 2009 (ARRA) is President Obama’s extensive vision for how the government will invest in America’s future. From health care to green technology to state budgets, the legislation represents a broad effort to return the country to a position of economic stability and prosperity. Included in these efforts are several tax provisions which could impact low- to moderate-income workers. The following is a summary of the major changes and how they might affect you.
Making Work Pay Tax Credit
This credit represents President Obama’s promise to lower taxes for 95 percent of American workers. The credit is equal to 6.2 percent of your earned income up to $6,450, for a maximum credit of $400 ($800 if filling jointly). Earners who make up $95,000 ($190,000 if filling jointly) are eligible for the credit. Taxpayers will receive the credit through a reduction in the amount income taxes withheld from their paychecks, beginning April 1st. The credit is in effect for the 2009 and 2010 tax years. Workers with more than one job may want to ask one of their employers to not reduce their withholding to ensure they will not owe taxes when they file in 2010.
Earned Income Tax Credit
The ARRA expands the Earned Income Tax Credit for larger families with three or more children and for married couples. The credit percentage increases from 40 to 45 percent for large families, meaning a maximum benefit of $5,657 in 2009. The act also widens the income range for a married couple to receive the credit. The credit applies to 2009 and 2010 tax years.
Child Tax Credit
The ARRA lowers the refundability threshold for the Child Tax Credit from $8,500 to $3,000 for 2009 and 2010. This means that more families will be eligible for the tax credit in 2009, and many who were eligible before will get a larger credit.
American Opportunity Tax Credit
This credit expands the Hope Education Credit for low- and moderate-income workers. It increases the maximum credit amount from $1,800 to $2,500. It expands the credit to apply to the first four years of post-secondary education (currently, the credit can only be used for the first two years). It expands the definition of what counts as an expenses to include the cost of any course materials. Finally, up to 40% of the credit is refundable. This means that a taxpayer who qualifies for the $2,500 and doesn’t owe any taxes can still claim a refund credit of $1,000.
Social Security Benefits
Although not technically tax related, there will be a one-time $250 dollar recovery payment for most individuals who receive Social Security, Supplemental Security Income, Railroad Retirement and Veterans benefits. You will receive it separately from your benefits by the end of May 2009. It will be delivered in the same way as your current benefits are received. For additional questions, check out http://www.socialsecurity.gov/.
This is a brief summary of the major changes to taxes that will affect low- and middle-income earners. To learn more, check out the Center for Economic Progress’ blog at http://www.workforward.org/ and check out http://www.recovery.gov/ for news, updates, or to get your voice heard about the American Recovery and Reinvestment Act of 2009.
Making Work Pay Tax Credit
This credit represents President Obama’s promise to lower taxes for 95 percent of American workers. The credit is equal to 6.2 percent of your earned income up to $6,450, for a maximum credit of $400 ($800 if filling jointly). Earners who make up $95,000 ($190,000 if filling jointly) are eligible for the credit. Taxpayers will receive the credit through a reduction in the amount income taxes withheld from their paychecks, beginning April 1st. The credit is in effect for the 2009 and 2010 tax years. Workers with more than one job may want to ask one of their employers to not reduce their withholding to ensure they will not owe taxes when they file in 2010.
Earned Income Tax Credit
The ARRA expands the Earned Income Tax Credit for larger families with three or more children and for married couples. The credit percentage increases from 40 to 45 percent for large families, meaning a maximum benefit of $5,657 in 2009. The act also widens the income range for a married couple to receive the credit. The credit applies to 2009 and 2010 tax years.
Child Tax Credit
The ARRA lowers the refundability threshold for the Child Tax Credit from $8,500 to $3,000 for 2009 and 2010. This means that more families will be eligible for the tax credit in 2009, and many who were eligible before will get a larger credit.
American Opportunity Tax Credit
This credit expands the Hope Education Credit for low- and moderate-income workers. It increases the maximum credit amount from $1,800 to $2,500. It expands the credit to apply to the first four years of post-secondary education (currently, the credit can only be used for the first two years). It expands the definition of what counts as an expenses to include the cost of any course materials. Finally, up to 40% of the credit is refundable. This means that a taxpayer who qualifies for the $2,500 and doesn’t owe any taxes can still claim a refund credit of $1,000.
Social Security Benefits
Although not technically tax related, there will be a one-time $250 dollar recovery payment for most individuals who receive Social Security, Supplemental Security Income, Railroad Retirement and Veterans benefits. You will receive it separately from your benefits by the end of May 2009. It will be delivered in the same way as your current benefits are received. For additional questions, check out http://www.socialsecurity.gov/.
This is a brief summary of the major changes to taxes that will affect low- and middle-income earners. To learn more, check out the Center for Economic Progress’ blog at http://www.workforward.org/ and check out http://www.recovery.gov/ for news, updates, or to get your voice heard about the American Recovery and Reinvestment Act of 2009.
Tuesday, March 24, 2009
Local evening food distribution
Starting this Thursday evening, March 26th, the Greater Pittsburgh Community Food Bank (GPCFB) is hosting an evening food distribution at it's warehouse on One North Linden Street in Duquesne from 5:30-7:30pm targeting unemployed and underemployed families.
There is no need to pre-register, but bring containers or bags to bring your groceries home with you. To read a recent article from the Post-Gazette with more details about evening food distribution at the GPCFB, click here.
. . .
With food banks facing increasing high demand because of the state of our economy, we feel fortunate that this sort of distribution is able to happen in our area at a time when people need it the most. But charitable contributions can only go so far, and our food banks are still in danger with the continual rising of food costs.
To read about more about the future of our food banks, with in depth commentary from food bank representatives from all over the country such as Iris Valanti from the GPCFB, check out "America's food banks need a bailout: The struggle to feed America's nouveau needy." on Salon.com. And feel free to leave comments...Monday, January 5, 2009
Tax site opens January 20th
As tax season approaches, Just Harvest is once again opening our doors with our FREE tax preparation site on the Southside. To be eligible, a single person must earn less than $20,000, and families must earn less than $40,000. We will e-file your tax return so you can get your refund in as little as nine days. You must have an appointment--no walk ins will be accepted. To schedule an appointment, call: (412)431-8964 after you have received all of your W-2s.
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