Why Stimulus Payments Were Delayed for 13 Million People: Live Updates

The New York Stock Exchange reversed course again, saying on Wednesday that it would remove China’s three major state-run telecommunications companies from the exchange.

The decision came after a day of pressure from the Trump administration and Congress following a decision by the exchange to let the companies — China Unicom, China Telecom and China Mobile — remain listed. That twist came a week after the N.Y.S.E. said the company’s shares would be delisted to comply with the Trump administration’s executive order on China investments.

The exchange said in a statement that it was complying with United States law and that the latest decision came following “new specific guidance” that it received from the Treasury Department’s Office of Foreign Assets Control.

The exchange will stop trading of shares in the companies on Jan. 11.

New Yorkers wait outside a store advertising to cash stimulus checks.
Credit…Sarah Blesener for The New York Times

The federal government has only just begun sending out a second round of stimulus payments, and many people are already waiting a little longer than expected for their money.

Many payments have been sent to inactive or temporary accounts that taxpayers don’t have access to. It’s not clear how many people are affected, but the tax preparation company Jackson Hewitt said the Internal Revenue Service had sent payments to more than 13 million bank accounts that were no longer open or valid.

“Because of the speed at which the law required the I.R.S. to issue the second round of Economic Impact Payments, some payments may have been sent to an account that may be closed or no longer active,” the agency said in a statement on Tuesday.

Companies like TurboTax, H&R Block and Jackson Hewitt sometimes set up temporary accounts for clients when they prepare returns. For example, clients who opts to have preparation fees deducted from their refund may be issued one of these accounts, allowing the tax firm to take its share and then pass on the rest. After that, the accounts are generally inactive — but may still be linked to the taxpayers in I.R.S. records. Payments that are sent to inactive accounts must be returned to the Treasury.

By law, the I.R.S. must issue payments by Jan. 15. People who don’t receive a payment can recover it on their 2020 tax return; the payment will become part of their regular refund, the I.R.S. said. (The Recovery Rebate Credit can be found on line 30 of the 2020 Form 1040 or 1040-SR.)

Taxpayers can check the status of their stimulus payments with the I.R.S.’s Get My Payment tool. If you don’t recognize the account number that received the payment, it may be one of these temporary accounts.

The tax preparation companies said they were working to get payments to customers.

H&R Block said it was already passing along stimulus payments to customers’ bank accounts and via prepaid debit card to certain customers. A spokeswoman for TurboTax said the company was working with the I.R.S. to help taxpayers receive their payments as soon as possible. And Jackson Hewitt suggested on its website that customers consider taking the rebate on their 2020 taxes.

Henry Paulson, the former Treasury secretary, in 2019. He will become the executive chairman of new fund run by the investment firm TPG.
Credit…Tiffany Hagler-Geard/Bloomberg, via Getty Images

Henry M. Paulson Jr., the former Goldman Sachs chief and Treasury secretary during the 2008 financial crisis, is rejoining the finance industry. He will become the executive chairman of TPG Rise Climate, a new fund run by the investment firm TPG.

The move brings Mr. Paulson, 74, back to the industry for the first time since he left Goldman to become Treasury secretary in 2006 under President George W. Bush. It may also signal a turning point for the weight and seriousness given to climate-related investments, already a focus for TPG. The firm’s co-founder, Jim Coulter, is planning to shift much of his focus to the new climate fund.

Mr. Paulson has spent the last 12 years since leaving his post at the Treasury away from the private sector, running his nonprofit institute and working on climate change initiatives. He was recruited to TPG, in part, by Bono, the musician and activist who helped found TPG’s $5 billion Rise funds focused on “impact investing.” He told Mr. Paulson that the investment firm wanted to create an even bigger platform to focus exclusively on combating climate change.

“I wasn’t looking to do this,” Mr. Paulson said. But he was persuaded by the success of TPG’s previous Rise funds — $2 billion of which are in climate-related investments. “At this stage in my career, I’m not looking to do a start-up. I’m in a hurry to make a difference,” he said.

Mr. Paulson and Mr. Coulter are looking to make investments in climate that are as profitable as any other kind of investment. Many other climate funds have a philanthropic stance or are willing to accept lower returns, “but the market will not scale for concessionary or subsidized returns,” Mr. Paulson said.

By: Ella Koeze·Source: Refinitiv

  • Investors began to react on Wednesday to the notion that Democrats could take control of the Senate, as the final votes were being counted in two Georgia Senate races.

  • The most notable response was in the market for government bonds, where the yield on 10-year Treasury notes climbed above 1 percent for the first time since March, reflecting expectations that a government controlled by Democrats would borrow heavily to stimulate the economy.

  • Stock trading was more muted, with the S&P 500 drifting from a small loss to a small gain in early trading. Shares of companies that stand to benefit from infrastructure spending and economic growth rallied.

  • As of Wednesday morning, Rev. Raphael Warnock was projected to beat the Republican incumbent, Kelly Loeffler; the second vote tally, between David Perdue, the Republican whose Senate term ended on Sunday, and Jon Ossoff was too close to call.

  • Bond yields rose because a Democratic agenda underpinned by government spending, both as a response to the pandemic and also to make long-sought upgrades to the nation’s infrastructure, would require more borrowing and increase the amount of Treasury notes and bonds in the market.

  • “Hopes for more proactive fiscal policy, including in support of a faster vaccination campaign” will prompt investors to bet on higher bond yields, analysts at ING wrote in a note.

  • The view in the stock market was more complicated. Technology stocks tumbled while shares of companies that might benefit from a rebounding economy rallied. Market watchers noted that high-flying tech stocks may be hit by higher taxes and stricter antitrust scrutiny under a Democratic Congress.

  • Banks, building materials companies and energy stocks led the gains. Zions Bancorp, equipment-rental company United Rentals and Vulcan Materials, which makes construction materials, were the best performing stocks in the S&P 500.

  • European stock indexes rose, led higher by banking and energy stocks. The Stoxx Europe 600 index rose 1 percent, while the FTSE 100 in Britain climbed 3.5 percent.

  • President Trump on Tuesday signed an executive order prohibiting transactions with eight Chinese software applications, including Alipay, the payment platform owned by Ant Group, and WeChat Pay, which is owned by Tencent. The move, two weeks before the end of Mr. Trump’s term, could help lock in his administration’s harsher stance toward China and is likely to further rankle Beijing. But defining the scope of the order and enforcing it would presumably fall to the incoming Biden administration.

  • OPEC, Russia and other oil major producers reached an unusual agreement on production quotas on Tuesday, with Saudi Arabia committing to reducing its oil production by one million barrels a day and Russia and Kazakhstan winning relatively modest production increases. The effect will be an overall reduction in oil production. The news pushed prices up more than 4 percent, reaching levels not seen since February.

  • The global economy faces a subdued recovery in 2021 as countries race to roll out coronavirus vaccines and businesses around the world try to emerge from pandemic lockdowns that have widened income inequality and piled on debt, the World Bank said on Tuesday. The global economy will expand 4 percent in 2021 after contracting 4.3 percent last year, the World Bank projected in its Global Economic Prospects report. The bank described the nascent recovery as “fragile” and said that its trajectory would depend on the success of widespread vaccine distribution.

Construction is among the industries that may be affected by a Labor Department rule on criteria for employee status.
Credit…James Tensuan for The New York Times

The Labor Department on Wednesday released the final version of a rule that could classify millions of workers in industries like construction, cleaning and the gig economy as contractors rather than employees, another step under the Trump administration toward endorsing the business practices of companies like Uber and Lyft.

Companies don’t have to pay contractors a minimum wage or overtime and don’t have to pay a share of contractors’ Social Security taxes or contribute to unemployment insurance on their behalf.

By contrast, companies that hire employees must provide them with those benefits and protections, which can raise labor costs 20 to 30 percent, according to estimates from industry officials.

“This rule brings long-needed clarity for American workers and employers,” the labor secretary, Eugene Scalia, said in a statement, adding that the rule makes it easier to identify legitimate employees “while recognizing and respecting the entrepreneurial spirit of workers who choose to pursue the freedom associated with being an independent contractor.”

The rule is scheduled to take effect on March 8, which will allow the incoming Biden administration to postpone it and perhaps set it aside.

In addition, as a so-called interpretive rule, it does not have the same legal force as a regulation, and it applies only to the laws that the Labor Department enforces, such as the federal minimum wage and overtime.

States and other agencies, like the Internal Revenue Service, may come to different conclusions about who has employee status.

But the rule could still have a substantial impact because employers often base their labor practices on the department’s approach.

Determinations of employee status typically hinge on several factors, but the department’s rule elevates two: how much control an employer exerts over the worker, and the extent to which a worker can increase his or her hourly income through entrepreneurial savvy rather than earning a set wage.

Critics have argued that there is no legal basis for elevating these two factors above others, such as the degree of skill involved in the work or whether the work is indefinite or temporary, and that the approach will deny employee status to many who deserve it.

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