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IRS provides tax inflation adjustments for tax year 2020

WASHINGTON — The Internal Revenue Service today announced the tax year 2020 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2019-44 (PDF) provides details about these annual adjustments.

The tax law change covered in the revenue procedure was added by the Taxpayer First Act of 2019, which increased the failure to file penalty to $330 for returns due after the end of 2019. The new penalty will be adjusted for inflation beginning with tax year 2021.

The tax year 2020 adjustments generally are used on tax returns filed in 2021.

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Spillovers from State and Local Pensions to Social Security: Do Benefits for Uncovered Workers Meet Federal Standards?

Federal law allows certain state and local government employees to be excluded from Social Security coverage if they are covered by an employer pension of sufficient generosity.  Public sector retirement systems have grown less generous in recent years, and a couple of plans could exhaust their assets in the next decade, putting benefits at risk.  If pension sponsors are inattentive to federal generosity requirements when cutting benefits, current and future initiatives to curb costs may conflict with their obligations to the U.S. Social Security Administration (SSA).  This project combines data from a variety of sources to assess whether state and local governments are currently satisfying the federal standards and whether the standards continue to provide benefits of equal generosity to Social Security.

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Public Workers Not Covered by Social Security Face Greater Burdens in Financing Retirement

State and local pensions have experienced many changes since the Great Recession.

Worried about high costs and a deteriorating fiscal situation, lawmakers in dozens of states have enacted a series of reforms to reduce promised benefits for current and future workers. Many of these benefit reductions have fallen on workers who are not covered by Social Security.

These workers do not enjoy the same portability of retirement benefits as workers who are covered by Social Security when they change jobs, making them more dependent on the retirement benefits provided by their employer.

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