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Tuesday, August 9, 2022

State Stimulus Checks In Over A Dozen States And More A Reality: Sparks Concerns Of More Inflation

With chances of further federal stimulus checks fading, more states are dipping into their savings to help out residents as they face an economic struggle as tough as during the period immediately after the pandemic shutdown began in the first quarter of 2020.

Maine and New Mexico were the first states to start sending stimulus checks to their residents and the latest to join the list are two diametrically opposite states, both geographically and politically. While Democratic Party-controlled California on the West Coast has gone all out and will be sending out a generous check of up to $1,050 to over 23 million residents, Republican-ruled Florida will send a $450 stimulus check to only around 60,000 of its residents.

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Florida joins over a dozen other states that have announced and even implemented some type of stimulus check even as increasing prices batter the budgets of low and medium-income households across the nation.

Inflation soared 9.1% in June when compared to prices last year. It is a continuation of an expensive trend that has been plummeting households for close to a year. Gasoline, food, other household items, and utility costs have been particularly burdensome, though there has been some relief for vehicle owners at the petrol pump.

Many states, including even Republican ones like Florida, are being forced to use surplus funds from the American Rescue Plan Act signed by President Biden in March 2021. The third stimulus check, or the economic impact payment, is part of ARPA.

 California Inflation Relief Payments

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It is now officially confirmed that around 60% of Californians who have filed their 2020 income tax returns will get a one-off payment totaling around $9.5B from the Democrat state starting in the last quarter of this year. The stimulus check is expected to offset rising inflation that has affected the prices of essential items including gasoline and food and has also led to a spike in utility bills and home rents.

Despite the continuous support of residents under the initiative of Governor Gavin Newsom, people continue to hurt as prices have seen a double-digit increase in the past two years. The Golden State Stimulus I and II proved great support after the federal stimulus checks stopped.

In the latest round of stimulus checks, in what is effective the state’s third round of payments, couples making up to $500,000 are eligible, thus effectively covering the majority of the population.

The highest stimulus check will go out to joint filers who earn $150,000 or less, called the Middle-Class Tax Refunds or the Better for Families Refunds. They will get a $350 relief payment each, and another $350 for at least one dependent. The total thus comes to a generous $1,050 for such families.

The California refund stimulus check amount will be based on the state-adjusted gross income as reported by residents in their 2020 state income tax returns. The refund will be for a single dependent and will be equal to the amount paid to the filer.

For single filers, that amount comes to $350 for those earning $75,000 or less. For income above $75,000 and $125,000 or less, the stimulus check amount will be $250. For those earning above $125,000 and $250,000 or below, the refund amount will be $200.

The amount doubles for a married couple filing jointly. The slab amount on which the stimulus check is calculated also gets doubled for joint filers. An extra amount of the same value will be added for a dependent.

For those who file as household heads, the income brackets are the same as those calculated for married couples filing jointly.

The Franchise Tax Board of California has said they expect to start sending out the stimulus checks between end-October and the middle of January. People who regularly file their returns with the FTB will receive their stimulus check automatically through a direct bank transfer. Those who do not file their taxes will receive their payment through a preloaded debit card. For the first time, even undocumented immigrants will qualify for a payment if they have filed their income tax returns for 2020 and also qualify through other requirements, according to a mailed clarification by a spokesperson for the Dept. of Finance, California.

The stimulus checks are exempted from state income tax. But the IRS is yet to clarify whether the payments are exempt from federal taxes. The payments will provide financial relief for residents who have been adversely impacted by the increase in prices of all products, especially essential items including gas and food due to several factors including supply chain disruptions, the economic downturn caused by the pandemic, and other economic pressures.

Republican Ruled Florida Also Moves In With Stimulus Checks

Governor Ron DeSantis of Florida last week announced that low-income families in the state will receive stimulus checks of $450 for each child. It is aimed at easing the toll that the record inflation is taking on the domestic finances of low and moderate-income families.

Ron DeSantis, despite vehemently opposing the stimulus check in line with the Republican Party, finally had to bow down and acknowledge the positive impact it has on American society and more importantly its economy and saved it from going under into a deep recession like it happened in 2009 after the stock market crash of 2008.

Other states that have sent stimulus checks or are in the process of sending include Maine. Maine has put forward one of the more generous stimulus check amounts for its residents. Governor Janet Mills has already signed the bill and payments are going out to beneficiaries every week. An average low and middle-income household in the state should earn around $1,700. Residents have till October 31 to file their returns and get their payment.

New Mexico has given relief for over three months. It includes a Child Tax Credit stimulus check of $175 a child, a tax rebate worth $250 for individual filers, and double that for married couples. Rebates began to reach residents starting in June.

South Carolina Residents who have filed their latest returns will get a refund that could go up to $800. Virginia will give a $250 stimulus check to individuals and double that amount for couples if they are eligible.                                           

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