Welcome to the Small Business Rundown. Each day, we bring you stories that impact small business owners and their workforce.
Small Business News Highlights for August 6:
- Unemployment benefit negotiations still underway
- New jobless claims hit lowest level since start of the pandemic
- Unemployment benefits subject to taxes, tax preparers issue warnings
Unemployment benefit negotiations still underway
“Why dismantle a program that almost all economists say is working and put something new in its place that will take months to go into effect?”
Top Democratic lawmakers are holding steady in their insistence that the federal government continue providing an additional $600 per week in unemployment benefits, resulting in a continued stalemate in Washington, D.C. Republicans reportedly agreed to as much as $400 per week, though leadership for both parties say that their respective packages are still trillions of dollars apart.
Democratic leadership insists on passing a comprehensive aid package, instead of the piece-meal approach to legislation favored by Republicans. Meanwhile, the Trump Administration continues to insist that they will pull out of negotiations entirely and address unemployment and eviction via executive order if the 2 parties do not come to consensus by tomorrow.
New claims for unemployment hit 1.186 million last week
“The tight correlation between cases and jobs has become even more clear, and to move aggressively below 1m claims weekly, we’ll need to gain better control of the virus.”
New claims for unemployment benefits hit 1.186 million for the week ending in August 1, the lowest level since the start of the pandemic. While this number is smaller than expected, it’s still well above weekly unemployment levels prior to the start of the pandemic.
As some states move backwards and others push toward removing all restrictions, economists note that the July labor report, due out tomorrow, is a bit of wildcard. In fact, one study found that up to a third of workers who went back to work during the pandemic have already lost their jobs again.
Unemployment benefits subject to taxes, tax preparers issue warnings
“This can spell trouble for those who are not actively withholding a portion of their unemployment income to put toward taxes.”
Tax preparers have a message for all 1.186 million people drawing unemployment for the first time: save money for taxes.
Tax preparers have begun issuing warnings to first-time recipients who might not know that unemployment benefits are subject to both federal and state taxes and who are in for a shock come next tax day.
When signing up for unemployment, workers have the option to have 10% automatically withheld, but many people do not know to do this.