Raphael Stevens

CrowdStrike IPO at the Nasdaq exchange June 12, 2019.Source: NasdaqCheck out the companies making headlines after the bell on Tuesday:Coupa Software – Shares of the software company climbed 6% after Coupa reported surprise fourth-quarter earnings. Coupa reported earnings per share of 17 cents on revenue of $163.5 million. Analysts polled by Refinitiv expected losses per share of 11 cents on revenue of $145.7 million.CrowdStrike – CrowdStrike shares popped 6% after the software company posted better-than-expected results for the fourth quarter. CrowdStrike reported earnings per share of 13 cents on revenue of $264.9 million. Analysts surveyed by Refinitiv predicted earnings per share of 8 cents on revenue of $250.4 million.Lennar – The homebuilder’s shares rose 1% after Lennar released the results for its fiscal first-quarter. The company posted a revenue of $5.33 billion. Analysts polled by Refinitiv expected revenue of $5.13 billion. Lennar also reported an adjusted profit of $2.04 per share, but it was unclear if it was comparable to a forecast of $1.71 per share.Eastman Kodak – Kodak shares slid 6% after the company reported results for 2020. The photography company posted a net loss of $541 million for the year on revenue of $1.24 billion. In the prior year, Kodak netted an income of $116 million on revenue of $1.24 billion.Plug Power – Shares of the hydrogen fuel-cell system developer dropped 9% after the company said it will restate financial statements for fiscal 2018 and 2019, along with quarterly filings from 2019 and 2020, due to accounting errors. More

Marko Geber | DigitalVision | Getty ImagesMillions of Americans who collected unemployment benefits last year got a new tax break from the American Rescue Plan.Here’s how it works.$10,200 tax breakPresident Joe Biden signed a $1.9 trillion Covid relief bill Thursday that waives federal tax on up to $10,200 of unemployment benefits an individual received in 2020.The break applies this tax-filing season, which started Feb. 12 and runs to April 15.It only applies to federal income taxes. States may decide not to offer the tax break.More from Personal Finance:When $1,400 stimulus check deposits will be officially availableCalls to extend the tax-filing season growWhy accountants aren’t urging clients to file taxes as soon as possibleThe IRS urged people who already filed their taxes not to file an amended return to claim the break. The agency will issue forthcoming guidance about what to do, the IRS said Friday.About 40 million people received unemployment benefits last year, according to The Century Foundation. The average person got $14,000 in assistance.Tax exclusionUnemployment benefits are generally treated as income for tax purposes. The new tax break is an “exclusion” — workers exclude up to $10,200 in jobless benefits from their 2020 taxable income.Individuals should receive a Form 1099-G showing their total unemployment compensation last year. The number is in Box 1 on the tax form.For married couples, each spouse can exclude up to $10,200 of their benefits. That would reduce couples’ joint taxable income by a maximum $20,400.Amounts over $10,200 for each individual are still taxable.For example, let’s say a married couple had a combined income of $100,000. That income includes $20,000 in benefits for one spouse, and $5,000 for the other.This couple can exclude $15,200 from tax. (The first spouse only gets a break on $10,200 of the $20,000.) The couple would pay federal tax on $84,800 of income instead of the initial $100,000.Who’s eligible?Not everyone qualifies for the tax cut. Only people who earned less than $150,000 in 2020 are eligible.This income threshold operates as a cliff: Anyone who earned $150,000 or more last year doesn’t get any of the tax break.The $150,000 ceiling is the same for all taxpayers, regardless of filing status, such as single or married.One wrinkle: Taxpayers must use their total unemployment benefits received when determining their income eligibility for the tax break.Let’s say a couple made $140,000 in combined job income last year. Each spouse also got $6,000 in unemployment benefits. Their total income would be $152,000, disqualifying them from the tax break.Modified adjusted gross incomeConstantine Johnny | Moment | Getty ImagesThe $150,000 income limit technically refers to a measure known as “modified adjusted gross income.”MAGI is a number the government uses to determine eligibility for some other tax breaks. (For example, a single filer can’t take a deduction for student loan interest this year if their MAGI is $85,000 or more.)Taxpayers will have to do a calculation to determine their MAGI in 2020.The formula uses information on Form 1040 and on Schedule 1.The IRS details the MAGI calculation (and how to claim the unemployment tax break) in online instructions posted Friday. They’re titled “New Exclusion of up to $10,200 of Unemployment Compensation.””I think what was cool is they were able to adopt an existing form that allows people to get the exclusion,” Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center, said of the IRS. “They didn’t have to come up with a new form.”That’s really very efficient.”The IRS is working with online tax preparers to update current tax software so taxpayers can determine how to report their unemployment income on their 2020 tax return, the agency said Friday.It appears digital tax preparers need some more time before their software can account for the new rules.”We are awaiting additional guidance from the IRS on how the unemployment exclusion will be implemented,” said Lisa Patterson, a spokeswoman for H&R Block.TurboTax expects updates to be available to taxpayers later this week, according to a spokeswoman.Form 1099-GFG Trade | E+ | Getty ImagesThe IRS listed a few other important notes for taxpayers regarding Form 1099-G.States may issue separate 1099-Gs for state-level benefits and the additional $600 weekly federal CARES Act supplement paid through July last year. If so, the two numbers should be added together.States may mail the forms or send them electronically. Workers should consult states’ unemployment compensation websites for more information.If the amount reported in Box 1 of Form 1099-G is incorrect, report only the actual amount of unemployment compensation paid in 2020, according to the IRS. This number would go on Schedule 1 (Form 1040), line 7, Unemployment Compensation.Further, workers who repaid an overpayment of unemployment benefits in 2020 should subtract the repaid amount from the total amount received, the IRS said. Enter the result on line 7. Also enter “Repaid” and the amount you repaid on the dotted line next to line 7. More

IronHeart | Moment | Getty ImagesExtra unemployment benefits offered by the American Rescue Plan may not arrive until mid-April or later, the U.S. Department of Labor said Monday.The $1.9 trillion Covid relief bill, which President Joe Biden signed Thursday, extended jobless aid to Labor Day and continued a $300 weekly enhancement to benefits.States need several weeks to tweak their computer systems and account for the changes, a Labor Department official said Monday in a memo to state unemployment agencies.More from Personal Finance:Here’s how the $10,200 unemployment tax break worksHere’s when direct deposits of stimulus checks will be availableDon’t file amended tax return to get unemployment tax break, IRS says”Acknowledging that states need time to modify their computer systems to accommodate the extensions and modifications, the Department expects many states will need until the middle of April or later to implement the new provisions and begin notifying individuals,” wrote Suzan LeVine, principal deputy assistant secretary at the Labor Department’s Employment and Training Administration.Prior rounds of additional pandemic aid for the jobless also took weeks — and sometimes months — to disburse, depending on the state.The $900 billion relief measure signed by former President Donald Trump in December extended benefits for the long-term unemployed to March 14. Others who hadn’t exhausted their maximum aid allotment can continue receiving federal benefits until April 11.It’s unclear whether the Labor Department believes a lag will apply to all or a subset of American Rescue Plan provisions. A Labor Department spokesman didn’t return a request for clarification.2 million workersPast experience suggests delays are more likely in certain programs than others, said Andrew Stettner, a senior fellow at The Century Foundation.Many states were able to issue a $300-a-week supplement offered by the $900 billion pandemic aid package without a delay, for example, Stettner said. That will likely be the case with the American Rescue Plan, he said.However, many states took several weeks to re-start benefits for those who’d run out of their maximum allotment by the time Trump signed the Continued Assistance Act. At least one state, Wisconsin, has yet to issue that extended aid to some workers.Zoom In IconArrows pointing outwardsSimilar delays may occur with the American Rescue Plan, for those whose benefits lapsed on March 14, Stettner said. He estimates about 2 million people fall into this category.  Of course, workers can only get the $300-a-week supplement if they are receiving unemployment benefits. So, a lag in extended benefits through programs like Pandemic Unemployment Assistance would mean a delay in the $300 boost, too.But a gap in benefits won’t be the case for all workers and in all states, Stettner said.Officials in Colorado, for example, estimated most workers would receive additional benefits without a lag.Zoom In IconArrows pointing outwardsThe Colorado Department of Labor and Employment got approval from the U.S. Department of Labor to deploy the extended programs before receiving official guidance from the federal agency, the state said Thursday.The approval meant Colorado could start reprogramming its computer system before receiving the official guidance the U.S. Labor Department issued Monday.”We are grateful that Congress took the necessary steps before the current programs expire, saving hundreds of thousands of Coloradans the financial hardship and gap in payments we saw earlier this year due to a delay in federal action,” said Joe Barela, executive director of Colorado’s labor agency. More

U.S. Federal Reserve Chairman Jerome Powell speaks to reporters after the Federal Reserve cut interest rates in an emergency move designed to shield the world’s largest economy from the impact of the coronavirus, during a news conference in Washington, March 3, 2020.Kevin Lamarque | ReutersA resurgent economy, percolating inflation and a stock market ripping higher don’t seem to make much of a recipe for easy monetary policy.But that’s the position in which the Federal Reserve finds itself.The challenge for the central bank this week will be to explain that position to investors and assure them that even if the status quo remains, that won’t provoke policymakers to change course, nor should they.”The basic line is, ‘Everything looks a little better, but there’s still a lot of uncertainty and we’re not going to do anything soon.’ I’m sure we’ll hear that,” said Bill English, former head of the Fed’s Division of Monetary Affairs and now a finance professor at the Yale School of Management.”They do want to suggest that things are better,” he said. “On the other hand, they don’t want to suggest that they’re going to change policy anytime soon. So it’s a tricky communication.”The Federal Open Market Committee, which sets monetary policy, meets Tuesday and Wednesday, followed by a news conference from Fed Chairman Jerome Powell.No one is expecting broad-stroke changes. Short-term borrowing rates will remain near zero, and the Fed will continue buying at least $120 billion a month in bonds to keep markets flowing and financial conditions loose.There will be much for investors to chew on from this meeting.Economic projections dueEddie Rodriguez, who works for the City of Hialeah, hands out unemployment applications to people in their vehicles on April 8, 2020 in Hialeah, Florida.Joe Raedle | Getty Images News | Getty ImagesFor one, individual members will update their forecasts for gross domestic product, unemployment and inflation.They last submitted estimates in December, before Congress approved two stimulus packages totaling nearly $3 trillion and before a Covid-19 vaccine rollout that is seeing 2.4 million Americans inoculated every day.Goldman Sachs recently raised its GDP forecast to 7% for the full year and also sees unemployment falling more rapidly than expected while inflationary pressures heat up.By contrast, the Fed’s Summary of Economic Projections in December indicated a median estimate of just 4.2% for GDP, along with an unemployment rate projection of 5% and core inflation running around 1.8%.Those numbers are likely to see “material upward revisions,” according to Bank of America.The GDP figure could be raised by “at least” 1.5 percentage points to a range of 5.7% to 6%, while unemployment could be taken down to 4.8% and inflation raised to the Fed’s 2% target, Bank of America estimated.Inflation already has become a headache for the Fed, with rising bond yields and market pricing rising, by one measure, to the highest level in nearly 13 years.The bank’s economic team in a note called this week’s meeting “one of the most critical events for the Fed in some time.”Powell “will have to strike the right balance” between an optimistic economic outlook and the Fed’s willingness to allow inflation to run hotter than usual in an effort to make sure that employment gains are broad and inclusive of income, race and gender, Bank of America noted.Powell could use the occasion to tee up some gradual policy adjustments ahead.”This will likely be the Fed’s first step in the less accommodative direction as they move to set the stage for a taper & eventual policy tightening,” the bank’s note said.Hawkish tilt possibleJerome Powell, chairman of the U.S. Federal Reserve, speaks during a virtual news conference in Tiskilwa, Illinois, U.S., on Wednesday, Dec. 16, 2020.Daniel Acker | Bloomberg | Getty ImagesIn recent weeks, markets had been speculating that the Fed would adjust its bond purchases to bring down longer-term rates that have jumped to pre-pandemic levels this year and caused volatility in the stock market.Powell has pushed back on that notion.Investors, through the Fed’s dot plot of individual members’ expectations, will get a look as to how broad the consensus is for an indefinitely unchanged approach.”Ostensibly, everyone is on board with the new framework, but it might not mean the same to everyone,” said Tom Graff, head of fixed income at Brown Advisory. “That might not mean [some members] are hawkish as much as they just view this average inflation targeting regime will work differently than maybe Powell does.”The market, then, could be left to decipher which policy “dots” are moving toward rate hikes. The market already is pricing in the possibility of increases in late-2022 and three total by the end of 2023, according to Citigroup. Current Fed estimates are for no moves until at least 2024.They do want to suggest that things are better. On the other hand, they don’t want to suggest that they’re going to change policy anytime soon. So it’s a tricky communication.Bill Englishfinance professor at the Yale School of Management”It’s going to be interesting, because how do you upgrade your GDP forecasts to 7% and your inflation target to 2% and your forecast for unemployment to 5% and then say we’re going to be super easy,” said Kathy Jones, chief fixed income strategist at Charles Schwab. “What they’ll try to emphasize is patience.”Jones said she doesn’t expect a shift in policy yet, with Powell emphasizing the importance of “as broad and inclusive increase in employment and decrease in unemployment as possible before they even consider raising rates.””They’re pretty comfortable waiting it out,” she said.English, the former Fed official and Yale professor, said Powell will emphasize “uncertainty” despite the progress with the virus and the economy.”Part of the communication will be ‘our reaction function hasn’t changed. We still want to achieve our objectives, we’re still going to be patient,'” he said. “The most likely outlook is better, but the world is an uncertain place. A lot can happen.” More