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Pay transparency is paramount as inflation weighs on most Americans’ financial standing.
Roughly one-third of job seekers said they wouldn’t even go on a job interview without knowing the salary the employer is willing to offer first, a recent report found.
One expert advises clients to inquire about a position’s salary during the initial phone-screening interview.

Workers are pushing for greater pay transparency, whether employers like it or not.
Such conversations around income expectations used to be “the elephant in the room,” said Vicki Salemi, career expert at Monster.com.

Now, 33% of job seekers said they would not even go to a job interview without first knowing the salary the employer is willing to offer, according to new research by job search site Adzuna. The survey, conducted in September, polled 2,000 U.S. adults who have looked for employment at least once over the last five years.
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As salary transparency laws slowly gain momentum, 28% of adults said a lack of pay clarity continues to be the greatest frustration when it comes to the job search, Adzuna found. 
A separate survey by employer review site Glassdoor found that 63% of employees prefer to work at a company that discloses pay information over one that does not.
The idea is that pay transparency will bring about pay equity, or essentially equal pay for work of equal or comparable value, regardless of worker gender, race or other demographic category.

Ask, ‘Do you have a budget for this role?’

“The reality is the job market is still strong,” said Mandi Woodruff-Santos, career coach and co-host of the Brown Ambition podcast, and that gives job seekers more leverage when it comes to benefits and pay.
Woodruff-Santos advises clients to inquire about a position’s salary during the initial phone-screening interview.
“I would ask them straight up: Do you have a budget for this role?” she said. “Then decide whether you want to proceed.
“I am in favor of getting it out of the way.”

‘Know your worth’ based on skills, experience

Salaries are in the spotlight as inflation weighs on most workers’ financial standing.
While wage growth has been high by historical standards, it isn’t keeping up with the increased cost of living, which is still rising at the fastest annual pace in about four decades, and that is leaving more workers unsatisfied with their pay.
When it comes to determining what you should be earning, “don’t rely on the job description alone,” Monster’s Salemi advised. “Know your worth based on your experience and skill sets and the norm for the industry you are in.”
But pay isn’t everything, she added. Other factors to consider include increased opportunities for advancement, flexibility and a healthy work-life balance, Salemi said.

Younger workers are paving the way to greater pay transparency overall, according to a another Bankrate.com report.
Roughly 42% of Generation Zers and 40% of millennials have shared their salary information with a co-worker or other professional contact, the survey found, compared to just 31% of Generation X and 19% of baby boomers.
“It’s our generation that’s unlearning that traditional line of thinking,” Woodruff-Santos said. Otherwise, “they could be selling themselves short.”
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While inflation in some U.S. metro areas is worse than the national average, location is just one factor that feeds into your personal rate of inflation.
On a monthly basis, inflation picked up in September, compared with August and July, the latest consumer price index reading shows.
The Federal Reserve is expected to continue pushing interest rates higher to battle this outsized rate of inflation.

Brandon Bell | Getty Images

There’s no question that persistently high inflation is pinching household budgets across the nation.
Yet, depending on variables such as location and spending patterns, your personal rate of inflation could be better or worse than the national average. In September, prices overall were 8.2% higher than they were a year earlier, as measured by the consumer price index, or CPI.

“Once you get into a high inflation environment, the difference in impact among individuals can be quite remarkable,” said Brian Bethune, an economist and professor at Boston College.
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Take location, for instance. Some metro areas in the U.S. come with an overall inflation rate that’s worse than the average, according to research from personal finance website WalletHub, which used data from the federal Bureau of Labor Statistics to compile its study.
In the Tampa, Florida, area, prices in September were 10.5% higher than they were a year earlier, the research shows. And in Phoenix, the rate of yearly inflation in August was 13%. (There’s a lag in reported data from some metro areas.)

Aside from where you live, the impact of inflation on your budget also depends on your personal expenditures, which fall into different CPI categories of expenses — say, transportation, dining out or medical care.

“You can have two people in the same city with very different spending habits,” said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York City.

Rent and groceries are pinching budgets

Higher prices are taking a toll on households, with 32% of them paying bills late in the past six months, according to a recent survey from LendingTree.
Grocery prices are up 13% from September 2021. So-called core inflation — which excludes energy and food — is up 6.6%. Shelter, which includes rent, has also climbed 6.6% in the last year and accounts for more than 40% of core inflation.
“Low- and middle-income households are spending most of their income on basic necessities [housing, food, energy],” said Dawit Kebede, senior economist for the Credit Union National Association.. 

Although inflation is a normal part of the economy, the current pace is far beyond the Federal Reserve’s target rate of 2%.
The nation’s central bank is expected to continue its campaign to bring down inflation by pushing interest rates higher. When the rate-setting committee meets in early November, it’s expected to raise the so-called federal funds rate by 0.75 percentage point for the fourth consecutive time. That rate has a ripple effect and ends up affecting the interest rate you pay on credit cards and loans.
The idea generally is that by making the cost of borrowing money more expensive, spending will drop and there will be less inflationary pressure due to lower consumer demand. This approach also can lead to job losses.

Another rate hike will “cause more pain for low- and middle-income households, as they’re among the first to be affected by rising unemployment,” Kebede said.
Right now, the job market remains tight: The unemployment rate is a low 3.5%. However, it is expected that an economic slowdown would translate into job losses.
Experts say it’s worth making sure you have a financial cushion (i.e., emergency savings) in case your income drops.

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Tens of millions of Americans can now apply for student loan cancellation.
In addition to your full name and date of birth, you’ll also have to provide your Social Security number.
Proof of income won’t be required unless the Education Department follows up with an additional request.

Student loan borrowers gather near The White House to tell President Biden to cancel student debt on May 12, 2020 in Washington, DC.
Paul Morigi | Getty Images

The U.S. Department of Education has launched its official application for student loan forgiveness, meaning tens of millions of Americans can now request the financial relief.
The launch follows a short beta test, during which time the Department of Education offered on and off access to the form while it tested the site. Borrowers could apply for forgiveness in those windows when the portal was open.

More than 8 million people applied for relief over the weekend, President Joe Biden said Monday during a speech at the White House.
“Today I’m announcing how millions of people, working-class folks, can apply to get this relief,” Biden said.
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The president announced in August that most federal student loan borrowers will be eligible for some forgiveness: up to $10,000 if they didn’t receive a Pell Grant, which is a type of aid available to low-income undergraduate students, and up to $20,000 if they did.
More than 40 million Americans are in debt for their education, owing a cumulative $1.7 trillion, a balance that far exceeds outstanding credit card or auto debt. Skyrocketing higher education costs coupled with stagnant wages have caused the amount of student debt people graduate with to soar. Today the average balance is more than $30,000, up from $12,000 in 1980.

Before the pandemic, when the U.S. economy was enjoying one of its healthiest periods in history, problems plagued the federal student loan system. Only about half of borrowers were in repayment in 2019, according to an estimate by higher education expert Mark Kantrowitz.
A quarter — or more than 10 million people — were in delinquency or default, and the rest had applied for temporary relief for struggling borrowers, including deferments or forbearances. These grim figures led to comparisons to the 2008 mortgage crisis.
In the background of the White House’s official application launch is a growing number of legal challenges brought by Republicans against the president’s plan.
“Republican members of Congress and Republican governors are trying to do everything they can to deny this relief, even to their own constituents,” Biden said. “Their outrage is wrong and its hypocritical.”
Here’s what borrowers need to know about applying.

What information does the application require?

In addition to your full name and date of birth, you’ll also have to provide your Social Security number.
If you don’t have those nine digits memorized, consult the Social Security card you were issued; it has your number on it. If you’ve lost your card, you can get a replacement at the Social Security Administration’s website.
You don’t need your Federal Student Aid ID, also called an FSA ID, to apply for forgiveness, and proof of income won’t be required unless the Education Department follows up with an additional request.
The department will verify a certain number of borrowers have told the truth about their eligibility as a fraud prevention measure, although more than 90% of federal student loan borrowers fall below the income caps for the relief: $125,000 for individuals and $250,000 for families.

How will the Education Department know if I received a Pell Grant?

The application for forgiveness doesn’t ask whether you received a Pell Grant. There’s no reason to worry, though, Kantrowitz said. The Education Department has that information already.

What happens after I apply?

After a borrower applies for forgiveness, they’ll receive an email confirmation from the Education Department, Kantrowitz said.
The department will then review the application to confirm eligibility, he said. Some borrowers may receive a request from the department for additional information, including proof of income.
When your request for relief is approved, you’ll receive an email saying so from the department. You’ll then hear from your loan servicer when the forgiveness has been applied to your account.
Make sure your servicer, as well as the Education Department, has the most recent contact information for you. You can do so at StudentAid.gov.

Have more questions?

The Education Department has a toll-free hotline for borrowers who have questions about the application: 833-932-3439.

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Inflation has impacted all groceries, but none more so than butter and margarine in the past year.
Margarine and butter prices rose 32% in September versus 12 months earlier, according to the latest consumer price index, issued Thursday by the U.S. Bureau of Labor Statistics.
A complex global trade dynamic for certain commodities and general inflationary trends in the U.S. have contributed.

Jeff Greenberg | Universal Images Group | Getty Images

Cue the collective gasp of chefs, bakers and foodies: Food prices are up considerably — but none more so than for butter and margarine.
Prices for these ingredients and spreads jumped 32% in September versus a year ago, the most among all grocery categories, according to consumer price index data issued Thursday.

Specifically, margarine prices popped by 44% and butter rose nearly 27% — substantially more than the 13% annual increase for the overarching “food at home” category, according to the CPI, a key inflation measure.
And those prices may well remain elevated at least through the rest of the year, according to experts.
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So, what gives?
The sharp rise is partly attributable to the same factors nudging up prices across the grocery aisle, such as elevated costs for labor and distribution, according to economists.

But it’s also due to global geopolitical events — like the war in Ukraine — as well as weather and other phenomena affecting the dairy industry and the market for vegetable oils, a key input for margarine.
“All the costs that go into producing a stick of butter, all those costs have risen,” said Matt Herrick, a spokesman for the International Dairy Foods Association, a group representing dairy producers.

Margarine: It’s all about the vegetable oil

Vegetable oil — including soybean, palm, sunflower and rapeseed (also known as canola) oils — is the most important ingredient in margarine by volume, according to Mac Marshall, vice president of market intelligence at the United Soybean Board.
Prices for those commodities tend to move together — meaning a supply disruption for one commodity affects vegetable oil as a group, Marshall said.

A farmer collects oil palm seeds in Indonesia on Aug. 19, 2022.
Aman Rochman/NurPhoto via Getty Images

Several recent factors have fueled tighter supplies of the commodities and therefore higher prices. By March this year, the price of all vegetable oils had spiked by 53% over its average in 2021 and by 153% over 2020, according to a United Nations food price index.
Global commodity prices have since retreated from those highs, but it may take a while before consumers feel the impact. Margarine on the shelves now was likely made with oils that manufacturers bought at higher price levels months ago, Marshall said.

Margarine prices swelled by about 4% in the month from August to September, meaning they’ve continued to trend upward in the short term.
The war in Ukraine, a major global food producer, has been perhaps the most significant driver of the price increase over the past year, economists said.

Why the war in Ukraine is affecting margarine prices

A destroyed Russian vehicle lies in a sunflower field in the Kharkiv region of Ukraine.
Maxym Marusenko/NurPhoto via Getty Images

Importantly, Ukraine is the world’s No. 1 producer and exporter of sunflower oil, which accounts for 9% of all vegetable oil produced globally. The sunflower is the country’s national flower, and became a symbol of solidarity for supporters after Russia’s invasion in February.
Ukraine accounted for 31% of global sunflower oil production in 2021, according to the U.S. Department of Agriculture. But the war crimped those exports, Marshall said.
“Market uncertainty about sunflower oil supplies from Ukraine has created additional demand for other vegetable oils, such as palm, soybean, and canola,” the department wrote in June. “Supplies of these alternatives are expected to be tight in the 2021/22 marketing year, contributing to elevated vegetable oil prices.”
Further, Indonesia and Malaysia are the world’s No. 1 and No. 2 producers of palm oil, respectively. Together, the countries represent 84% of the global supply, according to the Agriculture Department.

Palm oil accounts for 35% of all vegetable oil made globally, the largest share relative to the aforementioned oil commodities.  
Indonesia — which alone accounts for over half the world’s palm oil — imposed a temporary ban on exports in April. That ban lasted three weeks, though other restrictions such as an export levy were kept in place longer.
A severe drought in Canada’s prairies also led to a 35% drop in canola-oil production during 2021 and 2022, according to the Agriculture Department. Canada is the world’s biggest exporter of canola oil. Indeed, the word “canola” is a combination of “Canada” and “ola,” referring to oil.
And Brazil, the world’s biggest soybean producer and exporter, saw yields fall 14% last year due to weather conditions caused by the La Nina oceanic and atmospheric phenomenon, according to Gro, a data provider.

‘Slightly bizarre’ mix of factors raises food prices

The impact of Russia’s invasion of Ukraine extends much more broadly than sunflower-oil exports: It has disrupted supply lines and raised costs across the global energy and food complex.
Annual oil prices — and those of oil byproducts, such as gasoline and diesel — skyrocketed as a result. Inflation for the overarching “energy” category is up 20% in the past year, leading to higher production and distribution costs to bring food from farm to table.

All the costs that go into producing a stick of butter, all those costs have risen.

Matt Herrick
spokesman for the International Dairy Foods Association

Wages have also increased across the U.S. economy at their fastest pace in decades amid historic demand for workers. That dynamic has translated to higher labor costs for food manufacturers and distributors that, ultimately, nudge up supermarket prices.
“It’s this slightly bizarre mix of a whole bunch of different factors that have basically all happened at once,” said Andrew Hunter, senior U.S. economist at Capital Economics. “As a result, you have this widespread increase in food prices.”

‘Global milk supplies have tightened’

Hauke-Christian Dittrich/Picture Alliance via Getty Images

Butter has faced a “variety” of other headwinds, too, said Herrick, of the dairy producers group.
Milk is its foundational ingredient. It takes roughly 21 pounds, or more than 2.5 gallons, of whole milk to make a pound of butter.
But milk output among the world’s major exporters fell in 2022 through May — by 6% in both Australia and New Zealand and by 1% in the European Union, according to the Agriculture Department.
“Since the end of 2021, global milk supplies have tightened, propelling prices for manufactured dairy commodities higher,” the department wrote in a July report. Supply will likely remain tight due to “hot, dry conditions” in the EU, the report said.
While U.S. output has been stable, the country has increased exports to fill global demand, leading to a lower butter supply at home, Herrick said.
Net exports of butter tripled, to 19.3 million pounds, during the January-to-July period this year relative to the same time last year, according to the Agriculture Department. Butter stocks in cold storage were down 22% in August compared with a year earlier.
Higher feed costs for dairy cows — the price of soybeans and corn, in particular — have also contributed to rising butter prices, Herrick said.

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More than 8 million people applied for student loan forgiveness over the weekend while the application was in a beta test.
The U.S. Department of Education says that applications submitted during the testing period will be processed, and there will be no need to apply a second time.

Wpadington | Istock | Getty Images

Will I have to re-apply now that the form officially launched?

No. The Education Department says that applications submitted during the testing period will be processed. There is no need to apply a second time later.

What’s the advantage if I applied during beta?

Applications submitted during the beta period will be processed now that the official form has launched, said higher education expert Mark Kantrowitz. Those who applied during the beta, he said, “will be first in line.”
There are two main reasons it makes sense to act swiftly here.
A number of Republican legal challenges have been brought against the Biden administration’s student loan forgiveness plan, risking to put the policy in jeopardy.
But, Kantrowitz said, “any borrower who has already received forgiveness will likely get to keep it, even if the courts block the President’s plan.”

He went on: “The courts tend to not claw back benefits that have already been received.”
The Education Department also says that after a borrower applies for forgiveness, they will get the relief within six weeks.
Applying now means that when student loan payments restart in January, after the pandemic-era pause on the bills expire, you won’t have to make payments if your debt is fully erased or larger payments than necessary if you’re left with a smaller balance.

What information does the application require?

In addition to your full name and date of birth, you’ll also have to provide your Social Security number.
If you don’t have those nine digits memorized, consult the Social Security card you were issued; it has with your number on it. If you’ve lost your card, you can get a replacement at the Social Security Administration’s website.

Any borrower who has already received forgiveness will likely get to keep it, even if the courts block the President’s plan.

Mark Kantrowitz
higher education expert

You don’t need your Federal Student Aid ID, also called an FSA ID, to apply for forgiveness, and proof of income won’t be required unless the Education Department follows up with an additional request.
The department will verify a certain number of borrowers have told the truth about their eligibility as a fraud prevention measure, although more than 90% of federal student loan borrowers fall bellow the income caps for the relief: $125,000 for individuals and $250,000 for families.

How will the Education Department know if I received a Pell Grant?

The application for forgiveness doesn’t ask whether you received a Pell Grant or not. There’s no reason to worry, though, Kantrowitz said. The Education Department has that information already.

What happens after I apply?

After a borrower applies for forgiveness, they’ll receive an email confirmation from the Education Department, Kantrowitz said.
The department will then review the application to confirm eligibility, he said. Some borrowers may receive a request from the department for additional information, including proof of income.

When your request for relief is approved, you’ll receive an email saying so from the department. You’ll then hear from your loan servicer when the forgiveness has been applied to your account.
Make sure your servicer, as well as the Education Department, has the most recent contact information for you. You can do so at StudentAid.gov.

Have more questions?

The Education Department has a toll-free hotline for borrowers who have questions about the application: 833-932-3439.
[Editor’s note: Shortly after this article was published, President Joe Biden announced the official launch of the student loan forgiveness application. This article has been updated to reflect that news.]

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Source: Papa Johns

Investors white-knuckled their way through last week as the major averages swung sharply, fueled by key inflation reports.
On Thursday, the Dow Jones Industrial Average leapt 1,500 points from its low of the session to the highest point of the day. The major averages did an about-face Friday, with all three indexes closing with losses.

To pick the right stocks to get through this tumult, investors will need to think far beyond day-to-day volatility and dig into the details to find the long-term winners.
Here are five stocks chosen by Wall Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

Meta Platforms

Facebook parent Meta Platforms (META) has been beset by challenges. These include lower ad revenues, elevated technology costs, increased borrowing costs and chip shortages. Nonetheless, its focus on the metaverse is keeping analysts hooked on the stock.
At its recent Meta Connect conference, the company announced several key VR innovations and professional integration partnerships. The conference grabbed the attention of experts, many of whom believe that the number of metaverse users has yet to reach a significant figure. (See Meta Platforms Stock Chart & Stock Technical Analysis on TipRanks)
Notwithstanding the speculations, Monness Crespi Hardt analyst Brian White remains optimistic. He believes Meta to be “the clear leader in VR.” White recalled an IDC report which revealed that Meta had captured 90% of the global VR headset market in the first quarter of this year, thanks to its Quest 2 headset sales.

“After years of reports that Apple has ambitions in the AR/VR headset space, it will be interesting to watch the leading tech players battle it out in this nascent but promising market over the next decade,” said White, reiterating his buy rating and $230 price target for the company.
White has been ranked No. 545 among almost 8,000 analysts tracked on the TipRanks platform. Moreover, 54% of his ratings have successfully generated 9% average returns each, over the past year.

Qualcomm

Wireless communications semiconductor and equipment manufacturer Qualcomm (NASDAQ:QCOM) is one of the companies leading the ongoing global 5G broadband network rollout. Further, with the growth prospects of the Internet of Things (IoT), the company stands to benefit remarkably over the long term.
Apart from IoT, the company also has significant opportunities to grow in the automotive technology market. The company’s Snapdragon Digital Chassis is a suite of cloud-connected platforms that aid automotive technology like digital cockpits and advanced driver assistance systems, which are still emerging. (See Qualcomm Dividend Date & History on TipRanks)
Buoyed by these growth avenues, Tigress Financial Partners analyst Ivan Feinseth recently affirmed his buy rating on Qualcomm with a price target of $238. The analyst believes that 5G, IoT and automotive markets will accelerate business performance trends and drive long-term shareholder value.
Moreover, Feinseth believes that ample liquidity on Qualcomm’s balance sheet allows investments in technical innovations and key growth initiatives, “further enhancing shareholder returns through periodic dividend increases and share repurchases.”
Feinseth comes in as 333rd among nearly 8,000 analysts tracked on TipRanks. Moreover, 56% of his ratings have been profitable, each rating generating an average return of 9.5%.

Papa John’s

Another of the top choices of analysts is pizza company Papa John’s (PZZA). The company has been experiencing tough sales throughout summer, as negative customer sentiment regarding its former CEO’s controversies still haunt the company. Nonetheless, after conducting a survey of several Papa John’s franchises, BTIG analyst Peter Saleh emerged positive about the stock’s prospects.
“We believe Papa John’s is in the middle stages of its sales and economic turnaround after controversy and negative consumer sentiment weighed on the concept for over two years, pressuring unit economics and store closures and necessitating financial support from the company,” said Saleh. (See Papa John’s International Stock Investors on TipRanks)
The analyst highlighted the new leadership at the pizza company, which has assembled some strategies that could lead to an overall turnaround. These strategies have already improved Papa John’s operating efficiency, net unit growth, and franchisee alignment, and Saleh expects these improvements to continue throughout this year and the next.
The analyst assigned a buy rating on Papa John’s stock, but reduced the price target from $130 to $115 based on a reduced outlook for the next 12 months.
Saleh has a No. 606 rank among about 8,000 analysts tracked on TipRanks. His ratings have been successful 56% of the time, with each rating raking in an average of 8.8% return.

Chefs’ Warehouse

Another one of Peter Saleh’s top picks is food product distributor Chefs’ Warehouse (CHEF), which caters to upscale restaurants, fine dining establishments, hospitality venues, and specialty stores. Saleh reaffirmed his buy rating and $48 price target on Chefs’ following its recent release of benchmark data. The data indicated an uptick in the company’s high-end dining category, Knapp-Track High-End Steak, in September.
The analyst believes that the reopening of offices and increased corporate travel during September supported this growth. Moreover, the fact that Chefs’ raised its full-year guidance while reporting quarterly results, just five weeks after the last outlook raise, gave Saleh the confidence to be bullish on the stock. (See Chefs’ Warehouse Insider Trading Activity on TipRanks)
Additionally, with normal seasonality returning after last year’s omicron-led cancellations or postponements in events and corporate travels, Saleh expects the fourth quarter to be the strongest period of the year.
Furthermore, the attractively discounted valuation at which Chefs’ is trading is another reason for Saleh to consider the stock a buy.
“Shares are currently trading at slightly less than 9.0x our 2023 adjusted EBITDA estimate, far below its three- and five-year historical average of 14.3x and 13.8x, respectively. While valuation has been pressured by general economic concerns, we believe a pessimistic scenario is more than factored into shares with valuation at the lowest level seen in the last two years,” the analyst noted.

DHT Holdings

Omicron-led demand suppression and rocketing oil prices restricted ocean trade earlier this year, which led the crude tanker market to remain sluggish. However, crude oil tanker DHT Holdings (DHT) is still riding a streak of luck, thanks to a rise in the spot time charter equivalent (TCE) rates of medium-sized tankers.
Drewry analyst Nikesh Shukla appeared bullish on the stock in his recent company report update, where he reiterated a buy rating on the stock with a price target of $9. “The news of political uncertainty in China coupled with fears of a potential recession led to some correction in DHT’s stock price over the past three weeks, but we expect it to trend upwards again in 4Q22 on the back of elevated VLCC (very large crude carrier) earnings and robust seasonal demand,” said Shukla. (See DHT Holdings Blogger Opinions & Sentiment on TipRanks)
A strong balance sheet is another positive that keeps Shukla bullish on the stock. At the end of the second quarter, DHT’s leverage of 47.3% was much lower than the peer average of 90.5%. The analyst sees an improvement in this area over the next two years as the company reduces its debt.
Shukla noted that DHT’s total liquidity of $293.9 million, combined with a relatively low leverage puts the company in a favorable position to steer the business through rough patches in the crude tanker market.
Shukla holds the 989th rank among nearly 8,000 analysts followed on TipRanks. In all, 58% of the analyst’s ratings are profitable, each of which have generated an average of 11.8% returns over the past 12 months.

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The Inflation Reduction Act, which President Biden signed Aug. 16, created a tax credit for consumers who buy new electric vehicles.
The clean vehicle credit is worth up to $7,500. It’s nonrefundable, meaning buyers need to have a federal tax liability to get full or partial benefits.
The credit also comes with assembly, manufacturing and other requirements that may initially limit consumers’ tax break.

Tomekbudujedomek | Moment | Getty Images

The historic climate legislation President Joe Biden signed in August offered a federal tax break — worth up to $7,500 — to households that buy new electric vehicles.
But it may be tough for consumers to get the full value of the tax credit — at least initially.

That’s largely due to the structure of the clean vehicle credit and certain requirements for consumers and car manufacturers. Those roadblocks, however, are poised to ease in the longer term, experts said.

The tax credit ‘bummer’: It’s nonrefundable

The legislation, called the Inflation Reduction Act, made the tax credit “nonrefundable.”
That means consumers can only get the full financial benefit if they have a federal tax liability of at least $7,500. A nonrefundable credit offsets a consumer’s federal tax bill but any leftover value is lost.
Let’s say a consumer buys an electric vehicle today. When filing their 2022 tax return, the person finds they owe $5,000 in federal taxes. This person wouldn’t get the full $7,500 tax credit — they’d be able to claim $5,000 and cut their tax bill to zero. But the remaining $2,500 would be lost. In other words, those funds wouldn’t be issued to the consumer in a tax refund.
In addition, unlike some other tax credits in the bill — such as the “residential clean energy” credit for home solar panels and other installations — any unused value doesn’t carry over to future tax years to offset a future tax bill.

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“That’s kind of the bummer” of the credit, said Dan Herron, a certified public accountant and certified financial planner based in San Luis Obispo, California.
High-income consumers would generally be most likely to benefit from the full credit value relative to those with more modest earnings, since they typically have larger tax bills, Herron said. But the credit comes with some additional restrictions — such as an income cap, explained in more detail below — that will restrict how many of those households can benefit.
Meanwhile, middle- and lower-income buyers typically have smaller tax bills, meaning it’s more likely they wouldn’t collect the full credit, Herron said.
States, municipalities and utilities may also offer financial incentives for electric vehicle purchases.

How to tinker with your tax bill

Consumers who want to buy an electric vehicle and think their tax bills will be too small to get the full $7,500 can take steps to boost their tax liability — and therefore maximize the credit’s value.
For example, investors can consider converting a pretax retirement account to a Roth, a type of after-tax account; they’d owe income tax on that conversion. Investors can also consider selling winning stocks or other assets, thereby incurring capital gains tax.

“If you can harvest some gains or have additional income you can pull into 2022, maybe you consider that,” Herron said.
Workers can also adjust the tax withholding on their paychecks, opting to withhold less and thereby increasing the taxes they owe.
However, Herron doesn’t recommend this route due to potential unknowns. For example, an unexpected bonus during the year might mean a larger-than-expected annual tax bill, depending on the withholding adjustment.   

Parameters that may reduce the credit

Sinology | Moment | Getty Images

Aside from the tax credit’s structure, the Inflation Reduction Act set requirements around the new clean vehicles themselves that may limit the value of your tax break.
As of Aug. 16, when Biden signed the Inflation Reduction Act, final assembly of the car must occur in North America to qualify for a tax break. The U.S. Department of Energy has a list of vehicles that meet this standard.
Additional rules take effect in 2023.
First, there are income caps. A tax credit isn’t available to single individuals with modified adjusted gross income of $150,000. The cap is higher for others — $225,000 for heads of household and $300,000 for married couples who file a joint tax return. (The test applies to income for the current or prior year, whichever is less.)
And certain cars may not qualify based on price. Sedans with a retail price of more than $55,000 aren’t eligible, nor are vans, SUVs or trucks over $80,000.

There’s a lot of uncertainty.

Joel Levin
executive director of Plug In America

Two other rules apply to manufacturing: One carries requirements for sourcing of the car battery’s critical minerals; the second requires a share of battery components be manufactured and assembled in North America. Consumers lose half the tax credit’s value — up to $3,750 — if one of those requirements isn’t met; they’d lose the full $7,500 for failing to meet both.
It’s unclear which electric vehicles will meet these standards and qualify for a tax credit next year. There’s a chance none may immediately qualify, according to the Alliance for Automotive Innovation.
“There’s a lot of uncertainty,” said Joel Levin, executive director of Plug In America.
“If you need a car, I think it’s risky to delay buying in hopes of getting the credit,” he added. “It may not work out or it may be a couple years until it’s eligible.”

One other consideration: Consumers who buy a Tesla or General Motors model before the tighter rules kick in Jan. 1 aren’t eligible for a tax break based on earlier parameters around sales caps that are set to lapse at the end of the year.
There’s also another option: buying a used EV instead of new one.
The Inflation Reduction Act created a “credit for previously owned clean vehicles” worth up to $4,000 starting in 2023. The tax break comes with some restrictions (like a $25,000 cap on the car’s sticker price and lower income caps for consumers) but doesn’t carry the manufacturing and assembly requirements of new cars.

A more consumer-friendly option

Consumers who are willing to wait until 2024 to buy a new or used car — and get the associated tax break — will have the most consumer-friendly option at their disposal, experts said.
That’s because the climate law will then allow a buyer to transfer their tax credit to the car dealer. A dealer — which must register with the U.S. Department of the Treasury — would get an advance payment of the consumer’s tax credit from the federal government.
As a result, consumers can likely receive the full tax credit at the point of sale from the car dealer as a discount on the sticker price or a reduction in the vehicle’s down payment, Levin said. And they’ll get that discount even if they don’t have a tax liability, he added.
“It makes the credit much more valuable to people, especially people who are of moderate income and don’t have a lot of money sitting in their pockets for the down payment,” Levin said.

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The portal will be open for a short window to test its viability and collect data on the site’s functionality, according to The Washington Post, which was the first to report on it.
A preview of the application earlier this week suggested a full rollout of the application could come as soon as next week, higher education expert Mark Kantrowitz told CNBC.

Student loan borrowers gather near The White House to tell President Biden to cancel student debt on May 12, 2020.
Paul Morigi | Getty Images Entertainment | Getty Images

The  U.S. Department of Education began beta testing the student debt forgiveness application Friday night.
The application is available at StudentAid.gov. As of 8:45 p.m. ET Friday, the portal appeared to be functional, showing a short application and a button to submit it.

The portal will be open available on and off during the beta test, according to The Washington Post, which was the first to report on it.
“This testing period will allow the Department to monitor site performance through real-world use, test the site ahead of the official application launch, refine processes, and uncover any possible bugs prior to official launch,” an Education Department spokesperson told CNBC in an emailed statement.
During the beta period, the department’s technical team will occasionally pausing the site for assessments, refinements, and maintenance. During those pauses, the department will encourage borrowers visiting the site to check back so they can submit their application after the pause has concluded, or when the official site launches.
A preview of the application earlier this week suggested a full rollout of the application could come as soon as next week, said higher education expert Mark Kantrowitz.
Speaking prior to the launch, Kantrowitz said he had no firsthand knowledge of the Education Department’s test, but noted that “beta is a slow launch, making sure they get all the bugs out before they release it to everybody.”

“As soon as [the application] goes live to everybody, it’s going to be overwhelmed,” he added. “Just the announcement of forgiveness caused [site] slowdowns.”

Borrowers can apply for forgiveness during beta

Borrowers who happen upon the beta test link while it is live will be able to submit their forgiveness application ahead of the full rollout.
“If you do see the beta, there could be little glitches,” Kantrowitz said. “But if you successfully submit your application for forgiveness, you’ve submitted it.”
“During the beta testing period, borrowers will be able to submit applications for the Biden-Harris Administration’s student debt relief program,” said the Education Department spokesperson. “Those borrowers will not need to reapply if they submit their application during the beta test, but no applications will be processed until the site officially launches later this month.”

What to know about the forgiveness application

President Joe Biden announced in August that most federal student loan borrowers will be eligible for some debt forgiveness: up to $10,000 if they didn’t receive a Pell Grant, which is a type of aid available to low-income undergraduate students, and up to $20,000 if they did.
The relief is limited to individuals who earned no more than $125,000, or married couples or heads of households who made less than $250,000, in either 2020 or 2021.
The White House has said borrowers will be able to fill out and submit the short application for cancellation on a desktop computer or on their mobile phone.
Borrowers won’t need their FSA ID to apply, officials said. They will not be asked to prove their income on the main application, although some borrowers may later need to provide supporting documentation at the Education Department’s request.
Request relief as soon as the form launches, Kantrowitz said. There are several pending legal challenges against the Biden administration’s forgiveness plan. If your loans are forgiven before a lawsuit gets in the way, he said, “you probably get to keep your forgiveness.”
“As soon as it becomes available, everybody should apply,” he said.
Reporter Annie Nova contributed to this story.

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