Remember RALs? (Refund Anticipation Loan) A popular product for certain tax prep clients, before IRS eliminated earlier this century the "debt indicator" (back taxes owed) sent back to the ERO with the efile ACK.
Many people said RALs were very bad (they vilified H&R Block for promoting them) because, like paycheck loans, they put onerous interest rates on those least able to afford it, all just to get their own money in their pocket a few weeks sooner.
Now this. Recall that federal government employees were forced to have their employee withholding for Soc Sec deferred, now they have to start paying it back (suddenly much smaller take home pay). So here is how one credit union is responding. I don't really blame the CU, their rate is reasonable and they weren't the ones promoting this scam. But now I also wonder, were military servicemembers subjected to this deferral? That might change the likelihood of Congress doing anything to forgive the tax withholding (but hopefully still crediting the Soc Sec earnings record) of such wage earners.
"Most federal employees received COVID relief in the
form of deferred payroll tax deductions in 2020. Those
taxes will come due starting January 2021.
[credit union] is here to help. [credit union] Emergency Assistance
Loans, aka Buoy Loans, were developed specifically for
the Coast Guard. Rates are far below our regular rates
to qualifying Coast Guard personnel.
• Borrow up to $2500 for 12 to 24 months, with rates
starting at only 3% APR*"
Many people said RALs were very bad (they vilified H&R Block for promoting them) because, like paycheck loans, they put onerous interest rates on those least able to afford it, all just to get their own money in their pocket a few weeks sooner.
Now this. Recall that federal government employees were forced to have their employee withholding for Soc Sec deferred, now they have to start paying it back (suddenly much smaller take home pay). So here is how one credit union is responding. I don't really blame the CU, their rate is reasonable and they weren't the ones promoting this scam. But now I also wonder, were military servicemembers subjected to this deferral? That might change the likelihood of Congress doing anything to forgive the tax withholding (but hopefully still crediting the Soc Sec earnings record) of such wage earners.
"Most federal employees received COVID relief in the
form of deferred payroll tax deductions in 2020. Those
taxes will come due starting January 2021.
[credit union] is here to help. [credit union] Emergency Assistance
Loans, aka Buoy Loans, were developed specifically for
the Coast Guard. Rates are far below our regular rates
to qualifying Coast Guard personnel.
• Borrow up to $2500 for 12 to 24 months, with rates
starting at only 3% APR*"