There is some more good news this tax season. According to an online report by CNBC, certain US borrowers will get an extended reprieve. The report makes it clear that such borrowers have received a postponement or reprieve during this continued COVID-19 pandemic. All of this is made possible, according to the report, due to a pause in certain loan payments, collection, and interest increments. This article will look at this topic in more detail. Read on if you are interested.
COVID-19 Pandemic Loan Reprieve
To begin, this reprieve on loan payments, interest, and collection, according to the online report, ends after May 1, 2022. Furthermore, this has led to arising concerns amongst consumers. Such concerns include worries that the government would seize tax refunds that are sent to taxpayers after this date. According to this report by CNBC, fears have arisen that such seizures will include benefits aimed at low-income families. Included in this list is the child and Recovery Rebate tax credit.
News From The Education Department
However, according to this report, it does not seem like the US Education Department will restart its collections through the treasury department at this date. The report states that they will delay collections on various student loans for some six months after the COVID-19 pandemic payment pause.
What this means, according to the US Education Department agencies website is: “This policy means you won’t lose money from certain government payments, such as the child tax credit, Social Security payments, and tax refunds for the 2022 tax season”. The news report made that although the exact timing is unclear in this policy change. However, it does seem like they updated their policy last week.
Lastly, according to the report, the US government is allowed to seize an amount up to 100% of federal tax refunds to pay certain debts. These debts include child support, state income tax, and state income taxes. However, this suspension in the seizure of tax returns and social security benefits to settle outstanding student loans until November gives some reprieve to many. Indeed, this might be some very good news to low-income households who are already struggling as a result of the COVID-19 pandemic and its contemporary yet specific socio-economic conditions.