Latest news with #PAYE
Black America Web
an hour ago
- Business
- Black America Web
Student Loan Forgiveness Paused for IBR Borrowers
Source: Deepak Sethi / Getty Millions of student loan borrowers enrolled in a popular repayment plan are now facing uncertainty, as the U.S. Department of Education has temporarily halted loan forgiveness under its Income-Based Repayment (IBR) program. Income-driven repayment plans like IBR aim to ease financial pressure by capping monthly loan payments based on a borrower's income and family size. After 20 years of qualifying payments, borrowers become eligible for loan forgiveness. At the end of 2024, nearly 40% of the 33 million Americans repaying student loans were enrolled in one of the Education Department's four IDR plans, according to federal data. But legal challenges have disrupted all four plans. Three of them, the SAVE (Saving on a Valuable Education) plan, Income-Contingent Repayment (ICR), and Pay As You Earn (PAYE) were previously blocked by court rulings. And now, the IBR plan has also been affected. As of this week, forgiveness for approximately 2 million borrowers enrolled in IBR has been paused. The Department of Education confirmed the pause Tuesday, citing ongoing court injunctions related to lawsuits against the Biden administration's SAVE plan. 'The Department has temporarily paused discharges for IBR borrowers in order to comply with ongoing court injunctions regarding the Biden Administration's illegal attempts at student loan forgiveness,' said Education Department deputy press secretary Ellen Keast in a statement to CBS MoneyWatch. The lawsuits stem from the Biden administration's implementation of the SAVE plan — a sweeping repayment initiative designed to fix flaws in existing IDR programs. SAVE became highly popular, enrolling nearly 8 million borrowers by the end of 2024. Because the SAVE plan included provisions allowing borrowers to count forbearances and certain non-payments toward loan forgiveness, it also affected forgiveness eligibility in the IBR plan. As a result, the Education Department is now recalculating eligible payment counts and has paused all IBR loan discharges until the process is complete. The Education Department has not provided a specific timeline for when loan forgiveness under the IBR plan will resume. However, Keast said discharges will restart 'as soon as the Department is able to establish the correct payment count.' Are Other IDR Plans Affected? Yes. Forgiveness under the SAVE, ICR, and PAYE plans remains blocked by court decisions that questioned whether the Education Department had the legal authority to offer widespread forgiveness under those programs. However, the IBR plan, created under a different legal authority, is still considered valid, though it is now on pause due to the SAVE plan's entanglement. What Should Borrowers Do? Borrowers enrolled in IBR are encouraged to continue making their monthly payments. Even if their forgiveness is delayed, those who are already eligible will be refunded for any overpayments once discharges resume. 'For any borrower that makes a payment after the date of borrower eligibility, the Department will refund overpayments,' Keast said. Borrowers may also request forbearance through their loan servicer, though doing so may result in interest continuing to accrue on their remaining balance. Income-Based Repayment Forgiveness Delayed; What Borrowers Need to Know was originally published on
Daily Record
8 hours ago
- Business
- Daily Record
New online Pay As You Earn service helps people take control of tax affairs
The service will make it simpler and easier to check and update their income, allowances, reliefs and expenses. Lanarkshire workers can take control of their tax affairs as the government announced a new online Pay As You Earn (PAYE) service as HM Revenue and Customs (HMRC) sets out more than 50 measures to transform the UK's tax and customs system. The service for all PAYE taxpayers will make it simpler and easier to check and update their income, allowances, reliefs and expenses, and will be available via their Personal Tax Account or through the HMRC app. This service forms part of HMRC's Transformation Roadmap that sets out ambitious plans to become a digital first organisation by 2030, with 90 per cent of customer interactions taking place digitally. The roadmap sets out more than 50 IT projects, services and measures that, once delivered, will transform the UK's tax and customs systems, simplifying processes and making it easier to pay the tax that funds public services and deliver the government's Plan for Change. The plans to modernise the tax and customs system, introduce new AI technologies and work with third parties and intermediaries will make it easier for taxpayers, businesses and intermediaries to interact with HMRC. The digital first approach will see HMRC automating tax wherever possible and offering new digital self-serve options across a number of tax regimes. Alongside the new PAYE service, HMRC will save £50 million a year by moving customer letters and reminders to a digital first approach, reducing the reliance on paper correspondence, by the 2028 to 2029 tax year. Paper post provision will remain for critical correspondence and for the digitally excluded. Increasing the use and investment in AI will enable customers to meet their tax obligations and allow HMRC to monitor the tax system in near real time. HMRC plans to introduce AI in work areas including: HMRC advisers and caseworkers: using AI capability to automate call summaries and the use of internal GenAI Chat Assistants to support them in their work. Digital assistants: developing new AI-powered features to help customers easily navigate HMRC services and improve the ability to update HMRC's content and guidance on Compliance: delivering an automatic document identifier system for HMRC caseworkers to identify fraudulent documents during compliance activities by using a biometric likeness-liveness check. James Murray MP, Exchequer Secretary to the Treasury, said: "We are going further and faster to make HMRC fit for the 21st century, including delivering a simpler and easier system for all PAYE workers. "By 2030, taxpayers can expect a modern and innovative HMRC with cutting-edge AI, industry-leading customer service practices, and a laser focus on delivering taxpayer value for money by ensuring everyone pays their fair share."
Daily Mirror
a day ago
- Business
- Daily Mirror
New HMRC service will allow workers to 'take control of their tax'
HMRC has launched a new digital service that will make it much easier for 35 million people to take control of their taxes and the movements of things such as their income and expenses Good news - workers are now able to take control of their tax affairs following the UK government's announcement of a new Pay As You Earn (PAYE) service. Affecting 35 million on PAYE, the new digital system boasts more than 50 new measures, aiming to streamline processes and even cut costs by £50 million through reducing postal correspondence. Available via their Personal Tax account or through the HMRC app, it will now make it 'simpler and easier' for all PAYE taxpayers to check and update their income, allowances, expenses and reliefs, the shared. The new service forms part of HMRC's Transformation Roadmap, which launched on July 21, 2025, with a mission to become a digital-first organisation by 2030 and make 90% of customer interactions digital. Setting up over 50 IT projects, services and measures, it will transform the UK's tax and customs systems, making it easier to pay the tax that is spent towards public services and deliver the UK Government's Plan for Change. Under the digital-first approach, HMRC will offer additional digital self-serving alternatives across various tax regimes and, wherever possible, automate tax. The new PAYE service will also allow the HMRC to save an annual amount of £50 million, equivalent to 1,500 full-time nurses. To do so, they will swap customer letters and reminders to a digital-first approach to minimise the use of paper correspondence by the 2028/2029 tax year. The news follows other plans to incorporate more AI into their services, ensuring all guidance and content is up to date, as well as assisting in identifying fraudulent documents during compliance checks. READ MORE: HMRC alert as 1 million taxpayers 'haven't claimed money they're owed' James Murray MP, exchequer secretary to the treasury, said: 'We are going further and faster to make HMRC fit for the 21st century, including delivering a simpler and easier system for all PAYE workers.' 'By 2030, taxpayers can expect a modern and innovative HMRC with cutting-edge AI, industry-leading customer service practices, and a laser focus on delivering taxpayer value for money by ensuring everyone pays their fair share,' he explained. JP Marks, HMRC's Chief Executive and First Permanent Secretary, also commented: 'The Government's ambition is for a simpler tax and customs system and this roadmap sets out how HMRC will deliver a first-class experience that feels different to their customers.' He added: 'By 2030, UK citizens will experience a tax administration system that is more automated, more focused on self-service, and better set up to get things right first time so they can fulfil their tax obligations.' Other elements in the Transformation Roadmap are currently in progress for further usage, such as expanding the SMS confirmation services to include complaints, Self Assessment appeals, and other PAYE services. Interestingly, in the 2023 to 2024 tax year, HMRC collected 94.7% of the total tax due. Later this year, they will share an update on modernising behavioural penalties.
Daily Record
a day ago
- Business
- Daily Record
New HMRC service announced for workers to take control of their tax
HMRC has also set out more than 50 measures to transform the UK's tax and customs system. Income tax rises for Scots in April - how the changes affect you Workers are set to take control of their tax affairs after the UK Government announced a new online Pay As You Earn (PAYE) service for around 35 million UK taxpayers as HM Revenue and Customs (HMRC) sets out more than 50 measures to transform the UK's tax and customs system. The new online service for all PAYE taxpayers will make it simpler and easier to check and update their income, allowances, reliefs and expenses, and will be available via their Personal Tax Account on or on the official HMRC app. This service forms part of HMRC's Transformation Roadmap, which launched earlier this week. It sets out ambitious plans to become a digital first organisation by 2030, with 90 per cent of customer interactions taking place digitally. The roadmap sets out more than 50 IT projects, services and measures that, once delivered, will transform the UK's tax and customs systems, simplifying processes and making it easier to pay the tax that funds public services and deliver the UK Government's Plan for Change. The plans to modernise the tax and customs system, introduce new AI technologies and work with third parties and intermediaries will make it easier for taxpayers, businesses and intermediaries to interact with HMRC. The digital first approach will see HMRC automating tax wherever possible and offering new digital self-serve options across a number of tax regimes. Alongside the new PAYE service, HMRC will save £50 million a year - the equivalent of almost 1,500 full time nurses - by moving customer letters and reminders to a digital first approach, reducing the reliance on paper correspondence, by the 2028 to 2029 tax year. Paper post provision will remain for critical correspondence and for the digitally excluded. HMRC said increasing the use and investment in AI will enable customers to meet their tax obligations and allow the tax body to monitor the system in near real time. HMRC plans to introduce AI in work areas HMRC advisers and caseworkers: using AI capability to automate call summaries and the use of internal GenAI Chat Assistants to support them in their work. Digital assistants: developing new AI-powered features to help customers easily navigate HMRC services and improve the ability to update HMRC's content and guidance on Compliance: delivering an automatic document identifier system for HMRC caseworkers to identify fraudulent documents during compliance activities by using a biometric likeness-liveness check. HMRC said it will work with developers to create a set of principles which will set out HMRC's expectations of how third parties use AI in software where it interacts with the department and the tax administration system. These principles will give developers the confidence to introduce AI functionality into their products in the UK and minimise the risk of those products introducing error or non-compliance. James Murray MP, Exchequer Secretary to the Treasury, said: 'We are going further and faster to make HMRC fit for the 21st century, including delivering a simpler and easier system for all PAYE workers. 'By 2030, taxpayers can expect a modern and innovative HMRC with cutting-edge AI, industry-leading customer service practices, and a laser focus on delivering taxpayer value for money by ensuring everyone pays their fair share.' Mr Murray's key priorities for the department are: improve day-to-day performance and the customer experience reform and modernise the tax and customs system close the tax gap As announced at the Spending Review 2025, £1.7 billion will be provided to HMRC over four years to fund an additional 5,500 compliance and 2,400 debt management staff. HMRC said this will ensure more of the tax owed is paid, to fund public services. HMRC is focusing on tackling wealthy offshore tax non-compliance, with an additional 400 people set to work on wealthy offshore tax risks. This includes experts in private sector wealth management, who will help find and tackle non-compliance more effectively and train HMRC compliance staff. JP Marks, HMRC's Chief Executive and First Permanent Secretary, said: 'The Government's ambition is for a simpler tax and customs system and this roadmap sets out how HMRC will deliver a first-class experience that feels different to their customers. 'By 2030, UK citizens will experience a tax administration system that is more automated, more focused on self-service, and better set up to get things right first time so they can fulfil their tax obligations.' The Transformation Roadmap sets out timescales for delivery and HMRC is committed to reporting on progress. Work is underway to deliver some of the measures set out in the roadmap this tax year, including: extending the rollout of the SMS confirmation service to Self Assessment appeals, complaint cases and some PAYE services. improving Self Assessment registration service and streamlining the exit process for those customers who no longer need to file a Self Assessment tax return. expanding the rollout of the voice biometrics pilot to make customer verification easier when calling HMRC's helplines. a new service to give employed parents, who are newly liable for the High Income Child Benefit Charge, the choice to pay it directly through their tax code without needing to register for Self Assessment. launching an enhanced reward scheme for informants, targeting information on serious non‑compliance in large corporates, wealthy individuals, offshore and avoidance schemes. The new scheme will reward informants with compensation linked to a percentage of any tax taken. Further measures and projects to be delivered as part of the roadmap include: digitalising the Inheritance Tax service to provide a modern, easy-to-use system, that makes submitting returns and paying tax simpler and quicker. launching a new service to allow agents to digitally submit information which may impact their client's tax code. delivering a Digital Disclosure Service to allow customers and intermediaries to correct mistakes, pay liabilities and penalties for all taxes and duties. introducing an electronic trade documentation pilot to see how it could improve customs operations. progressing the Verifiable Credentials pilot with US Customs and Border Protection to test the use of new internationally interoperable digital credentials and identity standards. HMRC wants to incentivise taxpayers to pay their tax on time by simplifying and strengthening penalties. In the 2023 to 2024 tax year, HMRC collected 94.7 per cent of the total tax due. Those who meet their obligations and pay their tax on time should not be disadvantaged by the minority who don't follow the rules. HMRC will update on modernising behavioural penalties later this year.
Associated Press
2 days ago
- Business
- Associated Press
What's happening with forgiveness for student loans on income-based repayment plans?
NEW YORK (AP) — Amid a federal overhaul of student loan plans, many borrowers have been left wondering what it means for their hopes of loan forgiveness. In particular, those who are enrolled in a repayment plan known as income-based repayment, or IBR, have wondered if forgiveness will still be available to them. A recent update from the Education Department said forgiveness through the IBR plan is paused while systems are updated. 'IBR forgiveness will resume once those updates are completed,' the agency said. IBR is not affected by a federal court's injunction blocking former President Joe Biden's Saving on a Valuable Education, or SAVE, plan. The IBR plan was created by Congress separately from other existing repayment plans, including those known as PAYE and ICR. It's also exempt from some changes coming from President Donald Trump's tax and spending bill. Here's what to know. Which income-driven repayment plans are affected by the court's injunction? Following a court injunction last summer, loan forgiveness for the SAVE, Income-Contingent Repayment, or ICR, and Pay As You Earn, or PAYE, plans is currently paused because those plans were not created by Congress. The legal action called into question whether student loan forgiveness was authorized under the federal statute that governs those plans. The IBR plan was created under a different authority. IBR, created by Congress, reduces monthly payments for borrowers with lower incomes. It also invokes a statute that authorizes student loan forgiveness of the balance at the end of a 20- or 25-year repayment term. When will IBR forgiveness resume? The Education Department hasn't given a timeline for when its system update will be complete and forgiveness will resume. Should a borrower continue to make IBR payments in the interim? Borrowers enrolled in IBR who have reached the threshold for forgiveness but who are not seeing their loans discharged as a result of the pause may continue to make payments with the expectation that the Education Department will refund the excess payments. The plan offers forgiveness after 240 or 300 monthly payments, depending on when borrowers enrolled. Borrowers can also request forbearance from their loan servicer. In that case, interest would continue to accrue on any remaining balance. What changes are coming from Trump's 'big beautiful bill'? Trump's tax and spending law will eventually phase out the ICR, PAYE and SAVE plans, replacing them with the Repayment Assistance Plan. IBR plans will continue to exist and to provide forgiveness after 20 or 25 years. RAP, in contrast, will require 30 years of repayment before forgiveness is granted. ___ The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
