May 4, 2021
The Gateway For Payroll Data
Personal income surges by most on record as Biden delivers stimulus checks

Personal income rose 21.1% month over month in March

Consumers’ spending and personal income soared in March as more vaccinations fueled a further reopening of the U.S. economy and as the government sent out stimulus checks to millions of Americans.

Consumer spending, which accounts for two-thirds of U.S. economic activity, rose 4.2% last month, rebounding from last month's 1% decline. Analysts surveyed by Refinitiv were expecting a 4.1% increase.

Personal income, meanwhile, surged a record 21.1% versus the prior month, recovering from last month's 7% drop and topping the 20.3% increase that was anticipated. The spike came as the government sent out $1,400 checks to most Americans as part of the American Rescue Plan.

Paving the Payments Future
States' Personal Income Growth Highest in 20 Years

Every state saw its total personal income climb last year because of unemployment benefits, pandemic aid, and other public assistance. Without that government aid, most states would have seen declines.

Government assistance swelled in 2020 compared with a year earlier as policymakers pumped money into the economy to help Americans weather the pandemic, which upended normal economic patterns and left millions unemployed for much of the year. The sharp increase in government transfer payments more than offset a slight decline in inflation-adjusted earnings, which include wages from work plus extra compensation such as employer-sponsored health benefits, as well as business profits. Nationally, the sum of residents’ personal income from all sources rose 4.9% in 2020, the largest annual increase since 2000, after adjusting for inflation.

Arizona and Montana recorded the top personal income growth for the year, 7.1%. Both states benefited not only from a surge in government transfers but also from an increase in their workers’ aggregate earnings, unlike most other states. By comparison, Wyoming and several other states with economies more reliant on the energy sector experienced some of the weakest personal income growth as oil production dropped. These statewide sums are aggregates and should not be used to describe trends for individuals and households.

Tax Day for individuals extended to May 17:
Treasury, IRS extend filing and payment deadline

WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.

Tax Credits available to employers for providing paid leave to employees who take time off related to COVID-10 vaccines.

IR-2021-90: American Rescue Plan tax credits available to small employers to provide paid leave to employees receiving COVID-19 vaccines; new fact sheet outlines details
Biden administration wants to give the IRS authority to regulate the ‘wild west’ of paid tax preparers

There are no requisite professional standards at the federal level. The president’s American Families Plan wants to change that

Before a person can professionally cut hair, paint nails or be a general contractor, they’ll need a license.

But when it comes to preparing a tax return — a crucial transaction between taxpayers and government with accuracy penalties, audits and tax bills waiting if things go wrong — there are no requisite professional standards at the federal level.

President Joe Biden’s American Families Plan wants to change that by giving the Internal Revenue Service authority to regulate paid preparers at the federal level.

Biden plan would boost bank data sharing with IRS

  • President Joe Biden's $1.8 trillion American Families Plan would require banks and P2P payment services to report annual account inflows and outflows to the IRS — an effort that could help the agency collect an extra $460 billion in taxes, The Wall Street Journal reported Thursday, citing people familiar with the plan.
  • The new data requirements would mostly affect the bank accounts of business owners. High-income taxpayers disproportionately accrue wealth from harder-to-track sources such as partnerships and proprietorships. Up to 55% of taxes owed on less visible income streams is unpaid, the Treasury Department said in a statement Wednesday.
  • The effort would help the IRS chip away at a tax gap — the amount the agency says is owed, but hasn't been paid — last year that stood at $600 billion, a former IRS commissioner told the Journal. Focusing on unpaid taxes may be a way to delay raising taxes on people and entities that already pay the full amount owed.

Indiana Creates Consumer Loan License. by Weiner Brodsky Kider PC

The Indiana Department of Financial Institutions recently began accepting applications for the Consumer Loan License. Any entity engaging in consumer loan transactions under Ind. Code § 24-4.5-3 must obtain the license, and entities engaging in taking assignment of consumer loans or directly collecting consumer loan payments may also be required to obtain the license.

Entities holding a Consumer Loan License must submit a license transition request by filing a Company Form and Individual Form for each control person by October 31, 2021. This license does not apply to entities offering small loans (also known as payday loans) or mortgage loans.

Four Tactics Ensured Rent-A-Center's Successful Refranchise Push

Rent-A-Center is done refranchising, but the rent-to-own company and two of its operators shared some good advice to make the complex task of selling company units to franchisees a little easier.

In a Franchise Times Dealmakers Week session, franchisees Al Bhakta and David Paris joined Rent-A-Center vice president Michael Landry to talk through the topic with FT reporter Callie Evergreen.

The story starts in 2014. Rent-A-Center was not doing great, so the company thought about spinning off some of the worst-performing markets.

"You can look at the Rent-A-Center stock price and you can see we were in a decline. We were chasing a few different avenues and not focusing on the core business. So refranchising was a unique strategy that we could thought could address some underperforming markets and it did that," said Landry.

Three Steps to Fix the Student Lending System

Addressing deficiencies now will help more borrowers when the repayment pause expires

You may have heard the figure: 43 million Americans — 1 of every 5 adults — have federal student loans.

Although these loans are an important tool for borrowers who want to earn a college degree, the current student loan repayment system is complex and outdated — and can undermine borrowers’ efforts to repay their loans. As of September 2020, close to 20 percent of borrowers were in default on their loans and more than 1 million people defaulted each year, even before the pandemic.

To help borrowers during the pandemic, payments, interest and collection efforts for most federal student loans have been put on pause through September of this year. This pause has given many borrowers a much needed respite from debt obligations while creating an important window for lawmakers to address problems in the student loan repayment system. The short-term urgent need is to facilitate successful repayment, because once the pause ends, tens of millions of borrowers will reenter the system at the same time, possibly overwhelming it.

CFPB Consumer Complaint Bulletin Examines County-Level Demographic Data

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) issued a bulletin today analyzing complaints submitted by consumers in counties nationwide. In 2019 and 2020, the CFPB received more complaints on a per-capita basis from consumers living in predominantly minority counties than from consumers in predominantly white, non-Hispanic counties. Consumers in counties with the highest percentage of minority population submitted complaints at over four times the rate compared to counties with the lowest percentage of minority population.

“Consumer complaints support and inform the CFPB’s work, and provide key insight into emerging trends in the financial marketplace,” said CFPB Acting Director Dave Uejio. “Today’s report shows that while all people across the nation face financial hardships, a significantly higher rate of complaints come from ethnically diverse communities. The data raise concerns that deserve our further study and, as such, we’ll keep a spotlight on patterns or any abuses we see.”

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