The pandemic brought a wave of stimulus checks to the American people, businesses, and other entities that were unprecedented and finally worked out to around $5 T As the COVID-19 pandemic struck, the federal administration moved in quickly to send out the first of the stimulus payments in March 2020.
The world economy went into a total shutdown and the government realized that people would soon find it tough to even put food on the table.
And as the lockdown period extended it appeared that the administration would go on indefinitely to bail the economy out of the desperate situation.
The introduction of vaccines, the strict travel restriction, and the widespread mask mandate improved the situation and the US economy reveled in a rapid and sharp recovery. Pooled with the trillions in stimulus money pumped into the economy, inflation finally exploded in the last quarter of 2021 to a level not witnessed in decades.
Federal Stimulus Probably Check Over For Now
Of the $5 T injected into the economy, approximately $1.8 T was given directly to both individuals and families. Another $1.7 T went to support small and medium businesses. This helped prop up the economy at a crucial period and prevented it from going into a tailspin like the recession of 2009.
But the federal administration’s enthusiasm for direct stimulus checks has taken a backseat. The focus has shifted to building infrastructure. Economists have also warned that pumping so much directly into the economy contributed to inflation though the White House had differed on that line of argument. It has pointed to the supply issues that took a hit during the pandemic, and the war in Europe, for the rising prices of oil and other essential commodities.
But whatever the reason behind the record inflation rate, federal stimulus remains paused till the trend reverses or is over totally.
Hope Floats Through Other Forms Of Federal Payments
Though several pockets of the economy continue to grow at a healthy pace, the unemployment rate remains way above the pre-pandemic mark. The end of the unemployment stimulus checks and the enhanced child tax credit stimulus check has further pushed families into uncertain times.
Numerous proposals continue for another stimulus check and the extension of the enhanced CTC stimulus check for children. But they remain a distant dream till the economy begins to turn around.
States Step In With Inflation Relief Payments In Absence Of Federal Stimulus Checks
Even though the federal government has stepped out of the stimulus support system, other states have stepped in and are going ahead with their stimulus proposals. Though not as generous as the federal stimulus checks, they could be enough to pull people through the ravages of the high prices on all fronts.
Over a dozen states have moved to get their proposals approved though not all will be approved given the Republican opposition to more stimulus support in an election year. But some states have gone ahead with it and have already passed the bill.
Most states are falling back on huge surplus revenues collected during the boom periods of the last two quarters of 2021. This has been supplanted by the generous funds they received under the American Rescue Plan Act signed by President Biden in March 2021. The third stimulus check or the Economic Impact Payment is part of that act.
Maine Stimulus Check Is The First Off The Mark With Its $850 Stimulus Check
Maine has been the first off the mark with its direct stimulus check worth $850 to individuals. While most states are yet to get the bill through the state legislature, Governor Janet Mills has signed the state inflation stimulus check after the Maine Legislature approved the supplemental budget with bipartisan support.
Most Maine residents will receive a relief check of $850 as individuals and $1,700 for married couples who file jointly. Full-time residents of the state who have filed their state tax returns for 2021 will receive the stimulus checks immediately while for others it will be a delay.
The last date for filing the 021 returns is October 31, 2022. People who file their returns later will receive their stimulus checks on a rolling basis. The inflation relief checks have started going out to residents starting in June.
Even senior beneficiaries of social security checks who do not normally file income tax returns will have to file a return to receive the state stimulus checks.
Maine’s retirees will be exempted from paying income tax on additional retirement pensions from the state. The deduction for a resident has also been improved to $25,000 from the previous $10,000 in the tax year 2022, from the tax year 2023 it is $30,000 and $35,000 for the tax year 2024 and later.
Retirement pension income received from all sources will be excused from tax in Maine up to a limit of $35,000 for individuals by the tax year 2025. The average tax cut comes to $795 approximately.
Maine has also expanded the Property Tax Fairness Credit, enabling low and moderate-income earners to get relief on rent and property tax. This refundable tax credit will be $1,000 a year and $1,500 for seniors.
The payments are being issued by the Maine administration through the dept. of Administrative and Financial Services (DAFS).
Other states have also proposed various forms of stimulus support for their residents. While Gov. David Ige of Hawaii earlier proposed a $100 stimulus check for all taxpayers and dependents, the finance House Committee has increased the amount to $300 for all those earning $100,000 and below and $100 for others.
New York Governor Kathy Hochul has proposed a property tax rebate of $425 or $970 for low and moderate earners in the state. There are other proposals including suspension of state tax on gas through December and tax relief for affected businesses.
Legislators in Virginia are hashing out details of a $300 relief check to all resident taxpayers. Two other proposed bills will eliminate the grocery tax and suspend the state’s 26.2% gas tax for the year.
California, which has already passed two stimulus checks, the Golden State stimulus checks I and II have proposed gas and transit cards for its residents. The gas cards could come to $400 for every registered vehicle with families eligible for 2 cards max.