You know what day it is. The fourth day of the week is the day that we deliver the jobs report. Today’s news is slightly better than the last two weeks. A seasonally adjusted 1.2 million new people applied for unemployment benefits in the week ending Aug. 1, a marked drop from the 1.4 million in the previous two weeks. This marks the 20th week in a row that the Labor Department reported more than 1 million claims, a pandemic-driven phenomenon that had never occurred before.
Similarly, the number of people applying for expanded Pandemic Unemployment Assistance fell to 655,707 from 908,800, a whopping 28% drop. Through July 18, the Labor Department report said 31.3 million Americans remained on the jobless rolls. All of which saw their enhanced benefit end last week.
Friday’s monthly jobs report, a snapshot of the economy in mid-July, will give a deeper accounting of the unemployment situation.
Twenty Weeks of Extended Regular State Benefits
The Illinois Department of Employment Security (IDES) today announced 20 weeks of state extended benefits (EB) are now available to those who exhaust the allotted 26 weeks of regular state unemployment and the additional 13 weeks of federal Pandemic Emergency Unemployment Compensation (PEUC) benefits. Illinois law provides for 20 weeks of EB during times of “high unemployment,” as defined in the law, instead of the 13 weeks of EB that was available in Illinois since May.
Currently, there are 30 states providing 13 weeks of EB, and 19 states, including Illinois, providing 20 weeks of EB. South Dakota is the only state not currently providing any number of EB weeks. Those with questions or in need of assistance with unemployment benefits at this time are encouraged to visit IDES.Illinois.gov.
Enjoy the Weekend, but not a Month of Recess Yet
Senate Majority Leader McConnell said today that the Senate will technically be in session next week, but signaled he’s letting senators leave Washington, D.C., until an agreement is reached on a fifth coronavirus relief package.
“I will not be adjourning the Senate for our August recess today as has been previously scheduled. I’ve told Republican senators they’ll have a 24-hour notice before a vote, but the Senate will be convening on Monday and I’ll be right here in Washington,” McConnell said from the Senate floor.
The Senate was scheduled to start a four-week August break on Friday, not returning to Washington until early September. White House chief of staff Mark Meadows told reporters after his latest meeting on Wednesday with Treasury Secretary Steven Mnuchin, Speaker Nancy Pelosi and Senate Minority Leader Charles Schumer that they were still “trillions” apart on the price tag for a fifth bill. In other news, they’re still far apart on the majority of the other issues as well.
Taxes Might Come as a Surprise
Tax preparers are concerned that many of the millions of Americans receiving unemployment benefits due to the pandemic are unaware that they might owe money to the IRS next year. Jobless benefits are subject to federal income taxes, as well as state income taxes in most parts of the country, but workers who are collecting benefits for the first time may not be aware of those tax implications, or they might opt against having taxes withheld from their benefit payments.
People who do not have enough money withheld during the year could end up with smaller refunds or balances due to the IRS when they file their 2020 tax returns. Recipients of unemployment benefits have to pay federal income taxes on them, but not payroll taxes. Additionally, most states require people to pay state taxes on their unemployment benefits.
The taxable nature of unemployment benefits contrasts with the stimulus checks Congress authorized in the CARES Act. Those direct payments are not taxable income because they are considered advance payments of a tax credit.
When people apply for unemployment benefits with their state, they have the option to have 10 percent of each payment withheld for federal income taxes. But tax professionals said some people may not know how to sign up for withholding.
Additionally, tax professionals said some recipients may choose not to have taxes withheld from their unemployment benefits because they need as much money as possible immediately.
A survey commissioned by Jackson Hewitt in June found that 37 percent of U.S. adults thought unemployment benefits were not considered taxable income. About half of the 1,000 respondents did not know that recipients had to request taxes be withheld from unemployment compensation.
A survey in May conducted on behalf of Credit Karma of 1,022 unemployed adults who are receiving benefits found that 27 percent thought their benefits were not taxable. Of those who knew they had to pay taxes on them, about half said they are having taxes withheld.
Illinois has $300 million to help renters, homeowners catch up on payments
The money, $5,000 for renters and up to $15,000 for homeowners, is a way to forestall massive waves of eviction and foreclosure caused by the pandemic.
The money, part of the $3.5 billion that Illinois received from the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, “will help make people whole who were suddenly hit with income loss or unemployment by the COVID-19 crisis,” said Kristin Faust, executive director of the Illinois Housing Development Authority, which is administering the program.
The grants should “help stabilize people in their homes, which is where we need to be during this pandemic,” Faust said, and by preventing evictions and foreclosures, “stabilize landlords and communities.” In July, Governor Pritzker extended the moratorium through Aug. 22. When the moratoriums expire, housing policy experts say, not only Illinois but much of the nation could face a tidal wave of evictions.
For renters who qualify, $5,000 will be paid directly to their landlord. Applications for the Emergency Rental Assistance program open Aug. 10 at this website and close Aug. 21. An application requires the landlord to upload some information in support of the renter’s claim.
Homeowners who qualify can get up to $15,000 sent directly to their mortgage servicer. Applications for the Emergency Mortgage Assistance program open Aug. 24 at this website and close Sept. 4. Applicants must owe $425,000 or less on their mortgage, and the property must be their primary residence.
Both programs have household income limitations, spelled out on their separate websites. They also require applicants to provide evidence that they were up to date on their housing payments prior to the crisis, and only fell behind since then.
Governor Sends Another Warning
With coronavirus numbers continuing to move in the wrong direction, Governor Pritzker said it is only a matter of time before the state takes action to control the spread.
It was the third straight day Pritzker has warned that the pandemic is moving in the wrong direction and that people must renew efforts to wear masks and take other precautions to bring the numbers down again.
“Otherwise, it will only be a matter of time before the state of Illinois will be forced to step in on a regional basis and impose resurgence mitigations like closing bars, indoor dining and more to reduce the spread of the virus,” he said. At worst, he said, another stay-at-home order could be in the offing if people don’t act to control the spread of COVID-19.
Chicago Fed Survey
The newest version of the Chicago Fed Survey of Business Conditions is open for collection of responses. The last day to respond is Friday, August 7. You can access the survey here:
Finally, next week we will be presenting our Government Affairs Coffee Series as part of our virtual conference series. The topic will be a “Federal Update from Congressman Bill Foster.” This will take place on Wednesday, August 12th at 11:00 AM. You can register here to participate: http://jolietchamber.chambermaster.com/events/details/2020-webinar-august-12th-federal-update-from-congressman-bill-foster-5936
During the government affairs coffee series, we plan to discuss the next federal funding phase including the following topics:
- Unemployment Insurance
- PPP Round 2/”P4″
- Liability Protection
- Individual Stimulus Pyament
- Rent & Mortgage Assistance
- State & Municipality Funding
- Education & Testing Funding
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry