Taxpayers who already filed their 2020 returns should not amend them to take advantage of tax breaks that were created by the new $1.9 trillion pandemic relief legislation, the Internal Revenue Service commissioner, Charles Rettig, told lawmakers on Thursday, saying that the I.R.S. would automatically send refunds to those who qualify.
Mr. Rettig, speaking at a congressional hearing, was referring to a provision in the law that provides a tax exemption on the first $10,200 of jobless benefits collected in 2020 by unemployed workers whose households earned less than $150,000.
“We believe that we will be able to automatically issue refunds associated with the $10,200,” Mr. Rettig said.
According to The Century Foundation, about 40 million Americans received unemployment insurance last year.
The tax changes included in the most recent stimulus bill passed earlier this month, along with tax changes in the December aid package and the rush to disburse economic impact payments, have put severe pressure on the I.R.S. The agency said on Wednesday that Tax Day would be pushed back by a month, from April 15 to May 17, to give itself and taxpayers more time to handle returns and refunds.
The Treasury Department and the I.R.S. are also racing to develop new regulations and update systems to reflect other aspects of the March relief law.
Treasury officials said at a briefing on Thursday that they are working with the I.R.S. to develop a new online portal to disburse advance payments for the expanded Child Tax Credit, which will provide up to $3,600 per child under age 6 and $3,000 for children ages 6 to 17, regardless of whether a family earns enough to pay income taxes.
The portal will allow taxpayers to upload relevant data for midyear payment adjustments, such as the birth of a child, the officials said.
Treasury officials also said the department is working on additional guidance on how states can use money included in the relief law. That will include clarity about how states must repay relief funds if they decide to cut taxes after receiving aid.
Government workers have been particularly hit hard by the pandemic. Nearly 1.4 million of the 9.5 million jobs that have disappeared over the past year came from state and local work forces.
State and local government positions account for about 13 percent of the nation’s jobs, and the sector has historically been more welcoming for women and African-Americans, offering an entryway into the middle class.
But a report from GovernmentJobs.com, a recruiting site for public sector jobs, suggests that even in this corner of the economy, applicants who are not white males can be at a disadvantage.
The study, which analyzed more than 16 million applicants by race, ethnicity and gender in 2018 and 2019, found that among candidates deemed qualified for a job in city, county or state government, Black women are 58 percent less likely to be hired than white men. Over all, qualified women were 27 percent less likely to be hired than qualified men.
The disparity was surprising. In a survey of 2,700 applicants, nearly a third said they thought they were more likely to be discriminated against in the private sector than in the public. Black Americans, who make up 13 percent of the population, rely disproportionately on state and local government jobs, making up 28 percent of the applicants for positions.
There were steps that could mitigate bias. The study found that many more Black women were called in for interviews when all personally identifying information was withheld during the application screening process — so recruiters did not know a candidate’s name, race and gender. Using a standardized rubric with specific guidelines for each score also sizably increased the number of Black women called in.
Penisha Richardson, who is 35 and lives in Newport News, Va., is a specialist in technical support at a company making printers and copiers. She remembers that when she was looking for jobs — in the public and private sectors — she got many more responses when she listed her name as Penny instead of Penisha.
“I had one person tell me I should go by Penny because it’s easier to pronounce,” Ms. Richardson said.
Tens of thousands of borrowers who attended for-profit schools like Corinthian Colleges and ITT Technical Institute that defrauded students will have their student loan debts eliminated after the Education Department rescinded some changes made during the Trump administration that gutted a relief program.
“Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct,” said Miguel Cardona, the education secretary. “We will grant them a fresh start from their debt.”
The change will eliminate around $1 billion in student loan debt owed by around 72,000 borrowers, the department said. Most of them attended ITT and Corinthian, institutions that abruptly shut down years ago.
The relief program, known as borrower defense, allows those who can demonstrate that they were substantially misled by their school to have their federal student loans forgiven. Once little-used, the system was flooded with claims during the Obama administration after a series of large for-profit chains collapsed following a government crackdown on schools that saddled their students with high debts for a low-quality education.
For a time, the department granted any borrower with an approved claim a full discharge of their debts. But that changed under Betsy DeVos, the previous education secretary, who described the program as a “free money” giveaway.
In 2019, Ms. DeVos imposed a complicated new methodology that led to only partial relief for many successful applicants. Some whose claims were approved were told they would get $0 in relief.
Mr. Cardona said the department will abandon Ms. DeVos’s methodology and retroactively give those with approved claims a full discharge.
“I’m in a state of shock right now,” said Albert Paul Cruz, who earned an associate degree in computer networking systems in 2010 but never worked in that field. Last year, he received a letter from the Education Department telling him that his borrower defense claim had been approved but that none of his debts would be eliminated.
Mr. Cruz has around $60,000 in student loan debt; his late and missed payments on it have harmed his credit score and made it challenging to obtain a car loan. The debt was “nerve wracking” and kept him up at night — and the prospect of finally being free from it was amazing, he said.
“If this does wipe all the negatives off my profile, I just may finally get a piece of the American dream,” Mr. Cruz said.
By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet
Stocks on Wall Street fell on Thursday, after another big jump in yields on government bonds signaled that investors continue to worry about inflation and tighter economic policy as the economy recovers.
The trading mirrored moves seen earlier this month: Rising government bond yields reflect expectations for growth, but also the concern that it could lead to price increases that will prompt the Federal Reserve to pull back on its efforts to stimulate the economy.
The higher bond yields are a problem for the stock market, because they dampen the appeal of investments like technology stocks and mean that borrowing costs for consumers and companies will climb. That could hurt profits and spending throughout the economy.
On Thursday, the yield on 10-year Treasury notes climbed as high as 1.74 percent, the highest since January 2020. Yields on 30-year notes climbed above 2.5 percent, the highest since July 2019.
The S&P 500 fell 1.5 percent, its biggest daily decline since late February, while the Nasdaq composite was down 3 percent. Apple and Amazon fell more than 3 percent, while Microsoft and Alphabet fell more than 2 percent.
Tesla was among the biggest decliners on the S&P 500, with a drop of nearly 7 percent. Its shares, which gained 743 percent last year, have become particularly volatile as bond yields climbed in recent weeks. Beyond Meat, Peloton and Zoom Video Communications, all high-flying stocks, pulled back on Thursday as well.
Also weighing on the broad market was a sharp decline in crude oil prices that left oil producers like Occidental Petroleum and Marathon Oil among the worst performers on the S&P 500.
The jump in yields on Thursday came even after Federal Reserve policymakers projected on Wednesday that the central bank would not be raising interest rates anytime soon. On Thursday, the Bank of England also said it would hold interest rates at 0.1 percent and that its policymakers expected the increase in inflation in coming months to be temporary.
Jerome H. Powell, the Fed chair, indicated on Wednesday that he and his colleagues were not ready to even start talking about when they might reduce monetary support, including the bond-buying program.
Bill Papadakis, a strategist at Lombard Odier, said the Fed still left some questions unanswered. Policymakers did forecast higher economic growth and inflation and lower unemployment but left their projections for interest rates unchanged near zero.
“We do not know how far the Fed’s tolerance will extend,” Mr. Papadakis wrote in a note.
One of the Fed’s goals is full employment, which the labor market is still far from reaching. Data from the Labor Department on Thursday showed that 770,000 people filed first-time applications for state unemployment benefits last week, higher than the week before and exceeding economists’ expectations.
The BBC is planning to relocate 400 jobs outside of London as part of a sprawling plan by Britain’s public broadcaster to do more to represent all of the country and “get closer” to audiences.
“Over the next six years, the broadcaster will shift its creative and journalistic center away from London,” the BBC said on Thursday. It will also increase spending outside London by 700 million pounds ($975 million).
The changes include moving the BBC News technology reporting team to Glasgow in Scotland, the climate and science teams to Cardiff in Wales and the Asian Network news team to Birmingham in England. Sixty percent of spending on TV productions will be required to go to shows made outside of London as will 50 percent of radio and music spending.
The reshuffle comes after the broadcaster announced widespread job cuts in 2020 as part of a vast cost-cutting plan to save £800 million annually. The cuts include 450 positions from regional TV and radio stations.
The BBC has been under pressure on many fronts: from governing Conservative politicians who say it has a liberal bias; commercially from streaming giants like Netflix and Amazon Prime; financially from a decline in its main source of funding, the license fee collected from every viewing household; and from groups that say the BBC isn’t diverse enough.
In a staff meeting on Thursday, Tim Davie, who was appointed the BBC’s director-general last year, said that over the next six years, 1,000 jobs would move outside of London, a figure that includes 600 new jobs as well as the relocations. Later in the meeting, a trailer for the new season of the BBC’s popular police drama “Line of Duty” was played.
A decade ago, the BBC moved hundreds of jobs from London to Salford, near Manchester in the north of England, which is now the BBC’s largest center outside of London. But last year a government minister accused the broadcaster of still only focusing on the “metropolitan elite” and not serving smaller communities.
The changes at the BBC also reflect pressure the Conservative government is under from members of its own party to redistribute economic wealth around the country. Earlier this month, the Treasury department said it would open a second office in Darlington, in the north of England and move some jobs there.
Research released on Thursday put into sharp relief the turn toward streaming services during a year of pandemic lockdowns and movie theater closures.
In 2020, subscriptions to online video providers surpassed 1.1 billion globally, a 26 percent increase from 2019, according to an annual report by the Motion Picture Association on the state of the entertainment industry. (The organization no longer includes “of America” in its name.) The worldwide market for TV and movies watched outside theaters reached $68.8 billion, a 23 percent increase. Ticket sales, in contrast, totaled $12 billion, a 72 percent decline from 2019.
And 55 percent of adults in the United States reported that they had watched more films and TV shows through Netflix, Disney+ or another online portals in 2020. More than 85 percent of children and more than 55 percent of adults watched movies or shows on mobile devices.
They are scary numbers if you are a traditional movie executive in Hollywood. The question is whether the pandemic year has permanently shifted consumer behavior. Will audiences return now that movie theaters are reopening (the nation’s largest multiplex chain, AMC, will have restored operations at 98 percent of its locations by Friday) and studios are no longer delaying their biggest movies (“A Quiet Place Part II,” arrives exclusively in theaters on May 28)?
Perhaps the most telling part of the 63-page report came from reading between the lines. Theatrical statistics have always led the association’s annual accounting, even in years when ticket sales declined. This time, the first 32 pages were devoted almost entirely to home and mobile viewing.
The shift could just be about emphasizing the positive. But it was hard not to view the reordering as telegraphing Hollywood’s new pecking order. The Motion Picture Association has six member studios. Netflix, which joined in 2019, is the newest member. And of the others, Disney, Paramount, Universal and Warner Bros. are all embedded within corporations that are aggressively building streaming services. (Sony is the only exception.)
Leslie H. Wexner, the longtime chief executive of L Brands who retired last year, said on Thursday that he and his wife, Abigail, would not stand for re-election to the retailer’s board in May. The move signals a major step away from the company he built and its brands, Bath & Body Works and Victoria’s Secret.
The company, based in Columbus, Ohio, also said it had appointed two female executives to the board as independent members. In May, once the Wexners leave, six of the company’s 10 board members will be women, including its chair, and nine will be independent.
The new directors are Francis Hondal, president of loyalty and engagement at Mastercard, and Danielle Lee, chief fan officer for the National Basketball Association.
The changes come after reporting from The The New York Times last year showed that Mr. Wexner and his former chief marketing officer, Ed Razek, presided over an entrenched culture of misogyny, bulling and harassment at L Brands and Victoria’s Secret. The retailer and its parent company came under intense scrutiny for the lack of women in executive roles and on the board, as well as a dearth of independent oversight. L Brands, which is trying to spin off Victoria’s Secret, has been responding to the criticism by installing new executives, showcasing more diverse body types in its advertising and making changes to its board.
Mr. Wexner, who is considered the modern-day founder of Victoria’s Secret, also attracted unwanted attention after his close ties to the convicted sex criminal Jeffrey Epstein came to light in 2019. A law firm working on behalf of two independent L Brands board members contacted multiple current and former Victoria’s Secret employees last year, saying that it was investigating “allegations raised in shareholder demand letters and civil complaints concerning, among other things, connections between L Brands and Jeffrey Epstein,” The Times reported in November.
New research from California illustrates both the scale and the inequality of the job losses during the pandemic — and makes clear that the crisis is far from over.
Close to half of all California workers — 47 percent of the labor force before the pandemic — have claimed unemployment benefits at some point in the pandemic, according to a report released Thursday by the California Policy Lab, a research organization affiliated with the University of California. The report reveals stark inequities: Nearly 90 percent of Black workers have claimed benefits, compared with about 40 percent of whites. Younger and less-educated workers have been hit especially hard.
The total includes filings under the Pandemic Unemployment Assistance program, which has been plagued by fraudulent claims. But even a look at the state’s regular program, which hasn’t faced the same fraud issues, reveals remarkable numbers: Close to three in 10 California workers have claimed benefits during the crisis, and more than four in 10 Black workers. (Black workers, who are more likely to be left out of the regular unemployment system, are overrepresented in the Pandemic Unemployment Assistance program.)
“That degree of inequality is mind-blowing,” said Till von Wachter of the University of California, Los Angeles, one of the report’s authors.
Many of the people who lost jobs early in the crisis have since returned to work. But millions more have not. The Policy Lab found that nearly four million Californians had received more than 26 weeks of benefits during the pandemic, a rough measure of long-term unemployment.
“We have solidly shifted into a world where a large-scale problem of long-term unemployment is now a reality,” Dr. von Wachter said. Black workers, older workers, women and those with less education have been more likely to end up out of work for extended periods.
The Policy Lab researchers had access to detailed information from the state that allowed them to track individual workers through the system, something not possible with federal data. The data showed that since last fall, most unemployment filings haven’t come from new applicants but rather from people who returned to work temporarily, then lost their jobs again. How that kind of stop-and-start pattern will affect workers over the long term is unclear, said Elizabeth Pancotti, policy director at Employ America, a group in Washington that has been an advocate for the unemployed.
“It is unlike any other recession,” Ms. Pancotti said. “We know that long-term unemployment has these detrimental long-term effects. We don’t know what happens if you’re out of work for two months, you come back to work for two months, you’re out of work for two months, you keep going back and forth.”
Jerome H. Powell, the chair of the Federal Reserve, struck a characteristically cautious tone about the digital future of money during remarks on Thursday about the outlook for payments.
Any digital currency offered by a central bank “needs to coexist with cash and other types of money in a flexible and innovative payment system,” Mr. Powell said, speaking in a recorded video at a Bank for International Settlements event. He was emphasizing a finding from a recent report by a group of global central banks.
Mr. Powell said that the Fed’s Washington-based board was experimenting with central bank digital currencies, and that the Federal Reserve Bank of Boston was collaborating with researchers at the Massachusetts Institute of Technology on “complementary efforts.”
But the Fed has been a relatively slow mover when it comes to digital currencies, arguing that as the steward of the U. S. dollar, which is central to the global economy, it needs to move carefully rather than quickly when it comes to embracing the emerging technology. Some central banks in other countries are further along in their programs to develop digital cash — Sweden has been examining digital currency since 2017, and the Bahamas recently offered a so-called digital “sand dollar.”
The U.S. central bank is working on modernizing the payment system in other ways. It is setting up a faster or instant payments system, called FedNow, which is set to begin in 2023 or 2024. The service, details of which were released midway through 2020, is meant to offer round-the-clock processing and advanced security features. The goal is to streamline the nation’s clunky money transfer system, which can now take several days to clear checks and move funds into recipients’ accounts.
And Mr. Powell noted that the Financial Stability Board, a global organizing and oversight body, has set out a road map for improving payments across country lines.
“The Covid crisis has brought into even sharper focus the need to address the limitations of our current arrangements for cross-border payments,” Mr. Powell said.
Mr. Powell’s remarks come immediately on the heels of the central bank’s March meeting on Wednesday, at which officials left interest rates on hold near-zero and signaled that they expect to keep them at rock bottom for years to come — even as the economy heats up. He offered no further details about the economic outlook or the Fed’s economic policy plans in his prepared remarks.
Google said Thursday that was planning to invest $7 billion in offices and data centers in 19 states this year. It is the latest tech giant to expand its footprint while other companies retrench in a commercial real estate market roiled by the pandemic.
Sundar Pichai, Google’s chief executive, said in a blog post that the move would create 10,000 jobs at the company this year. Alphabet, Google’s parent company, employed around 135,000 people at the end of 2020.
The plan includes investments in data centers in places like Nebraska, South Carolina and Texas. The company recently opened its first office in Minnesota and an operations center in Mississippi. It will open its first office in Houston this year.
“Coming together in person to collaborate and build community is core to Google’s culture,” Mr. Pichai wrote. Google was one of the first companies to tell employees to work from home in the early stages of the pandemic, and it now expects workers to begin returning to offices in September. When that happens, it will test a “flexible workweek,” with employees spending at least three days a week in the office.
Other large companies have recently announced similar moves allowing more remote work. Ford Motor said on Wednesday that it would transition to a “flexible hybrid work model,” allowing workers to stay home for focused work. Target said last week that it would transition to a partial-remote model. And Salesforce said in February that it was adopting a “Work From Anywhere” plan that would give its employees flexibility in how, when and where they work.
Many of Ford Motor’s employees will continue to work remotely at least some of the time after the pandemic is over.
The company said on Wednesday that it would transition to a “flexible hybrid work model” that will allow workers to stay home for focused work and come into the office for collaboration-based activities, such as team-building exercises.
In the United States, Ford has more than 30,000 employees working remotely because of the pandemic. The new system will go into effect in July, when the company, which has its main campus in Dearborn, Mich., expects to gradually start bringing more employees back to the office, it said.
“Every non-place-dependent employee, from our leadership team on down, will participate in the hybrid approach,” Kiersten Robinson, the company’s chief people officer, wrote in a handbook distributed to employees. “While we recognize this will take different skill sets and resources, we see it as a great accelerator and competitive advantage for the company. It will enable us to be agile and nimble, and to unleash the full potential of our team.”
Ford is the latest company to announce that remote work will continue even after the pandemic ends.
In February, San Francisco-based Salesforce said it would not require the majority of its global work force to return to the office after the pandemic is over, adopting a “Work From Anywhere” plan that would give its employees flexibility in how, when and where they work. Target also has said it would transition to a partial-remote model and would shed some of its office space.
Special acquisition companies, or SPACs, have raised more than $84 billion so far this year, a milestone for one of Wall Street’s hottest trends.
Also known as “blank check” companies, SPACs are publicly traded shell companies that raise money to acquire an unspecified private company at some point in the future, usually within two years.
As of Wednesday, the value of funds raised by blank-check companies had surpassed the total raised in all of 2020, which was a record for SPAC listings. According to Dealogic, so far this year, 264 SPACs have listed their shares, compared with 256 last year.
SPACs sitting on some $135 billion are seeking takeover targets, according to SPAC Research. Because they typically buy companies five times their size, by taking on outside investors at the time of acquisition, that implies buying power of well over $600 billion, setting up a scramble for deals in the coming months.
Some SPAC deals have run into trouble, most recently Lordstown Motors, an electric vehicle company that went public through a blank-check firm last year. It said on Wednesday that it was cooperating with an inquiry from the Securities and Exchange Commission, after an investment firm accused it of misleading investors about its business prospects.
Returns for investors in SPACs can be heavily tilted toward the initial sponsors and investors who buy shares early, before an acquisition is made. The latest frenzy has also attracted a host of celebrities to join SPAC teams as advisers or investors, including Jay-Z and Serena Williams, helping attract attention in an increasingly crowded field. The S.E.C. recently issued a warning to investors that said, “It is never a good idea to invest in a SPAC just because someone famous sponsors or invests in it.”