Dependent Care: Current Tax Benefits and Legislative Issues

CRS_January_2005_dependent_care.pdf: 450 downloads, before Oct. 1, 2020

Social Security: The Windfall Elimination Provision (WEP)

The windfall elimination provision (WEP) reduces the Social Security benefits of workers who also have pension benefits from employment not covered by Social Security. Its purpose is to remove an advantage or “windfall” these workers would otherwise receive as a result of the interaction between the Social Security benefit formula and the workers’ relatively short careers in Social Security-covered employment. Opponents contend the provision is basically imprecise and can be unfair

Social Security: What Would Happen If the Trust Funds Ran Out?

The Social Security trust funds are projected to become exhausted in 2033, according to the 2013 Social Security Trustees Report. If Congress does not act before then, the trust funds would be unable to pay full Social Security benefits on time. The Social Security Act does not specify what would happen to benefits if the trust funds became insolvent. However, it is clear that full Social Security benefits could not be paid on time because the Antideficiency Act prohibits government spending in excess of available funds. After insolvency, Social Security would continue to receive tax income, from which approximately 77% of benefits could be paid. Either full benefit checks would be paid on a delayed schedule or reduced benefits would be paid on time. In either case, Social Security beneficiaries and qualifying applicants would remain legally entitled to full benefits and could take legal action to claim the balance of their benefits. Social Security solvency could be restored by cutting Social Security’s spending, increasing its income, or some combination of the two. Over the long range (i.e., over the next 75 years), the Social Security trustees estimate that the trust funds have a shortfall of $9.6 trillion in present value terms, or 2.72% of taxable payroll. The sooner Congress acts to fill this gap, the smaller the changes to Social Security need to be, because earlier changes could be spread to a larger number of workers and beneficiaries over a longer period of time. If Congress waits until the moment of insolvency to act, the trust funds’ annual deficits could be eliminated with benefit cuts of about 23% in 2033 that will gradually rise to about 27% by 2087. Congress could also eliminate annual deficits by raising the Social Security payroll tax rate from 12.40% to 16.1% in 2033, then gradually increasing it to 17.2% by 2086. To maintain annual balance after 2086, larger benefit reductions or tax increases would be required. Prompt action to restore Social Security solvency would be advantageous. The combined trust funds began to run annual cash-flow deficits in 2010. Cash-flow deficits require the redemption of government bonds accumulated in earlier years. Cash-flow deficits do not affect Social Security directly. However, if the non-Social Security portion of the federal budget is in deficit, redemption of trust fund bonds puts additional pressure on the overall federal budget. Earlier changes would allow workers and beneficiaries time to adjust their retirement plans. Finally, if Congress were to act today, the benefit cuts or tax increases necessary to restore solvency until 2087 would be smaller than those needed if Congress waited until the trust funds became insolvent to act

The Work Opportunity Tax Credit (WOTC)

[Excerpt] The Work Opportunity Tax Credit (WOTC) is meant to induce employers to hire members of families receiving benefits under the Temporary Assistance to Needy Families (TANF) program and other groups thought to experience employment problems regardless of general economic conditions (e.g., food stamp recipients and ex-felons). In 1997, Congress passed the Welfare-to- Work (WtW) tax credit to focus specifically on more disadvantaged TANF recipients. The 109th Congress folded the WtW credit into a revised WOTC as part of the Tax Relief and Health Care Act of 2006. This report contains a description of the WOTC and closes with a legislative history of the WOTC

Social Security: The Government Pension Offset (GPO)

Social Security spousal benefits were established in the 1930s to help support wives who are financially dependent on their husbands. It has since become more common for both spouses in a couple to work, with the result that, in more cases, both members of a couple are entitled to Social Security or other government pensions based on their own work records. Social Security generally does not provide both a full retired-worker and a full spousal benefit to the same individual. Two provisions are designed to reduce the Social Security spousal benefits of individuals who are not financially dependent on their spouses because they receive benefits based on their own work records. These are • the “dual entitlement” rule, which applies to spouses who qualify for both (1) Social Security spousal benefits based on their spouses’ work histories in Social Security-covered employment and (2) their own Social Security retired or disabled worker benefits, based on their own work histories in Social Securitycovered employment; and • the GPO, which applies to spouses who qualify for both (1) Social Security spousal benefits based on their spouses’ work histories in Social Security-covered employment and (2) their own government pensions, based on their own work in government employment that was not covered by Social Security. The GPO reduces Social Security spousal benefits by two-thirds of the pension from non-covered government employment. The GPO does not reduce the benefits of the spouse who was covered by Social Security. Opponents contend that the GPO provision is basically imprecise and can be unfair. Defenders argue it is the best method currently available for preserving the spousal benefit’s original intent of supporting financially dependent spouses, and also for eliminating an unfair advantage for spouses working in non-Social Security-covered employment compared with spouses working in Social Security-covered jobs (who are subject to the dual entitlement rule)

Unemployment Compensation (UC) and the Unemployment Trust Fund (UTF): Funding UC Benefits

CRS_March_2005_Unemployment_Compensation_and_the_Unemployment_Trust_Fund.pdf: 743 downloads, before Oct. 1, 2020

Taxation of Unemployment Benefits

Unemployment compensation (UC) benefits have been fully subject to the federal income tax since the passage of the Tax Reform Act of 1986 (P.L. 99-514). Individuals who receive UC benefits during a year may elect to have the federal (and in some cases state) income tax withheld from their benefits. Legislation was introduced in the 108th Congress that would have repealed the taxation of UC benefits, provided a two-year suspension of the taxation of UC benefits, or transferred the proceeds from taxing UC benefits to the Unemployment Trust Fund. This report provides an overview of the taxation of UC benefits and legislation related to taxing UC benefits

Veteran Benefits: An Overview

[Excerpt] The Department of Veterans Affairs (VA) offers a wide range of benefits and services to eligible veterans, members of their families, and survivors of deceased veterans. VA programs include disability compensation and pensions, readjustment benefits, and health care programs. The VA also provides life insurance, burial benefits, housing and other loan guaranty programs, and special counseling and outreach programs. While eligibility for specific benefits varies, veterans generally must meet requirements related to discharge type and length of active duty military service. This report provides an overview of major VA benefits and the VA budget. It will be updated as events warrant

Unsupervised Time Series Extraction from Controller Area Network Payloads

This paper introduces a method for unsupervised tokenization of Controller Area Network (CAN) data payloads using bit level transition analysis and a greedy grouping strategy. The primary goal of this proposal is to extract individual time series which have been concatenated together before transmission onto a vehicle's CAN bus. This process is necessary because the documentation for how to properly extract data from a network may not always be available; passenger vehicle CAN configurations are protected as trade secrets. At least one major manufacturer has also been found to deliberately misconfigure their documented extraction methods. Thus, this proposal serves as a critical enabler for robust third-party security auditing and intrusion detection systems which do not rely on manufacturers sharing confidential information.Comment: 2018 IEEE 88th Vehicular Technology Conference (VTC2018-Fall