Weekly Digest – February 2 2022
Just as the Omicron surge appears to be peaking in the U.S., a new strain of the Omicron variant has emerged. The new strain, called BA.2, so far appears more contagious than its sibling Omicron variant, BA.1, but is also less likely to cause severe disease compared with the Delta variant. The new variant is spreading quickly in Denmark, England, and Germany, and has also been detected in parts of the U.S., including California, Texas, and Washington. Fortunately, preliminary data from the U.K. shows that a third shot of COVID-19 vaccine protects against the new BA.2 variant just as well as it does against the BA.1 variant.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
The IRS has released a set of FAQs for the Recovery Rebate Credit to help people file their 2020 tax returns. These cover a broad range of topics, from the process for claiming the credit, eligibility, and correcting problems. For example, Question F2 explains the three ways taxpayers can find the amount of the Economic Impact payments they received so they can calculate their Recovery Rebate Credit correctly on their 2021 tax returns.
Some families may be entitled to additional stimulus payments if their family situations changed during 2021. The 2021 Recovery Rebate Credits were disbursed based on calculations from 2020 or 2019 returns, so taxpayers who had a child in 2021 or who have added an additional dependent such as a parent, nephew, niece, or grandchild may be eligible for an additional payment of $1,400. Any remaining payments will be provided as a refund when 2021 tax returns are filed.
Monthly Child Tax Credit Payments
According to the IRS, some people are receiving Child Tax Credit letters (Letter 6419) with incorrect amounts. If in doubt, taxpayers should check their IRS Online Account and use the amount reported in their account. Using the correct amount will help ensure that refunds are paid promptly within 21 days. As a reminder, couples who filed Married Filing Joint will each receive a letter reporting half of the payments received. When filing 2021 tax returns, married couples will need to combine both amounts when they file their joint return. For more information on the expanded child tax credits see the IRS FAQs.
If you retire and later return to work after you’ve enrolled in Medicare, you may have the option of dropping Medicare and enrolling in your company’s health insurance plan. Your options depend on the size of the company. If you work at a company with fewer than 20 employees, you will most likely need to continue your Medicare coverage to avoid paying higher premiums later. Depending on the costs, it may not be cost-effective to sign up for your employer’s plan. Employees at larger companies may be able to drop Medicare coverage, but there are additional rules. For example, employees can’t enroll in the company’s HSA unless they drop Medicare Part A, and if an employee is already collecting Social Security payments, they cannot drop Part A unless they also repay all of the Social Security benefits so far received.
Sometimes employees “boomerang” back to former employers, perhaps because the new job wasn’t all they hoped for, or they want to return after learning new skills. Before saying yes, the Harvard Business Review recommends considering five questions. For example, are you hiring the boomerang employee because it seems like the easy option? The team, company, culture, and role may have changed in the interim. Does this returning employee bring the right skills and knowledge to advance the business? Make sure this person has the right skills to fit the job.
Not everyone who’s taking part in the Great Resignation is jumping immediately into a new job. Many people are taking a sabbatical as a way to rest, recover, and reconsider life goals. According to data from the Society of Human Resource Management, the number of people taking sabbaticals has tripled over the last four years. Some people take the time to travel while others stay home. Some have found new careers and new directions in their lives.
From the employers’ point of view, workers can’t be found to fill vacancies at any price. But if you ask job seekers about their experiences, they have a different take, according to a compilation of complaints to Slate’s Direct Report column. A common theme is that employers have not adjusted to the big changes to the job market over the last few years and are expecting high levels of experience but are only offering low pay and stingy benefit packages. Other employers seem to be compensating for a tight labor market by adding additional skills and responsibilities that are nearly impossible to find in one person.
REMOTE AND HYBRID WORK OPTIONS
What will the future of work be like? This article in the Harvard Business Review outlines 11 trends that will shape work for 2022 and beyond. For example, fairness and equity will be the defining issues for organizations. Another trend is that some employers will shorten the work week rather than increase pay. Also, the complexity of managing a hybrid workforce will drive some employers to require a return to the office.
Working remotely can make it hard to establish boundaries between work and life. A few helpful strategies can help you remain productive and have a life outside of work. Learn to say no when a boss or coworker asks you to take on work that pushes your capacity beyond its limits. Develop routines or rituals that define the start and end of your workday so that you have a transition into and out of work mode. Stick to a schedule so you’re spending your most productive time on the most important tasks.
Hybrid work schedules have been touted as the best of both worlds: productive time spent at home combined with time in the office for collaboration and meetings. However, many find the frequent switching from remote to in-office exhausting and jarring. Workers who alternate days working at home and in the office have a harder time getting into a regular, productive rhythm of work, especially when they need to transport laptops and other and materials between home and office every day. Hybrid work schedules are most successful when managers and workers discuss what works best for each person.
U.S. GDP increased at 6.9% during the last quarter of 2021, stronger than the 5.5% rate predicted by economists. Despite a surge in COVID cases at the end of the year, personal and business spending increased, while government spending decreased. Risks of the global pandemic still remain, but the strength of the economy is a testament to the adaptability of government and businesses to the challenges.
A sign of the tight labor market is the 4% increase in wages and benefits that employers spent in 2021, an increase not seen since 2001. However, the increase in pay has not kept up with inflation, which rose by 4.9% in December over the prior year, according to the Federal Reserve’s core personal-consumption expenditures price index. Even though the economy has recovered only about 84% of the pre-pandemic jobs, investors and Federal Reserve policymakers consider the labor market to be nearly at full employment.
- IRS resources for stimulus payments:
- Use the Get My Payment tool to check on EIP payment status
- Eligibility and general information about Economic Impact Payments
- A list of frequently asked questions for stimulus payments
- IRS information about the Advance Child Tax Credit Payments
- Portal to update information
- A list of frequently asked questions on the advance Child Tax Credit Payments
- The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
- Entrepreneur put together a listing of free tech resources for remote work
- The Consumer Financial Protection Bureau has warnings about COVID-related scams
- PC Magazine explains how to carry your vaccination card on your phone
- How to create a strong password
We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!