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Tuesday, September 27, 2022

States Continue To Send Stimulus Checks To Residents: 7 States Prepare To Send Inflation Reliefs In August

Federal emergency stimulus checks cushioned the impact of the pandemic and the accompanying economic shutdown on workers and businesses and contributed to making life a lot bearable during one of the worst crises America faced after WW II. The economy also turned around much quicker and the recession was the shortest ever.

For the low and moderate-income millions who were pushed out of the workforce by the pandemic, federal assistance was the lifeline that prevented a plunge into a prolonged period of poverty, hunger, homelessness, and financial devastation. The series of stimulus checks sent to a majority of American homes helped people put food on the table, pay off high-interest debts, and helped prevent defaulting on their loans, utility bills, and home rent.

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The federal stimulus checks are long gone, especially for those who are in most need of it and there is little imminent prospect of a fourth round. The three rounds of stimulus checks and the other support measures that helped keep millions of people, small and medium businesses, schools, hospitals, and other organizations stay afloat have ended. There appears little chance of them being revived shortly.

The Winding Down Of The Federal Stimulus Checks Created A Vacuum

The new year saw the lifeline being snapped as the federal administration got caught up in Washington’s vicious politics. The Republicans used their numbers in the Senate to force the Biden administration to back down. The antics of two Democratic Senators, Joe Manchin, and Kyrsten Sinema, did not help the matter either. The stimulus checks ultimately died a quiet death, at least in Washington.

The lending program that helped millions of small businesses retain workers on their payroll has winded down. The same goes for eviction moratoriums that are keeping people in their homes. They have expired in many cities. The extension of the child tax credit stimulus checks was also blocked by the Senate.

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The multi-trillion dollar assortment of federal programs helped low-income groups by preventing a pileup of bills and long lines at food banks. it mitigated the damage to the economy from a natural disaster of this nature and magnitude and the economy recovered quickly.

But the successive federal support measures were never meant to be a long-term solution to the economic problem and were a short-term offset at the most. And with its end came the inflation which brought in another round of despair and hopelessness. The economy needed further support.  

But hope came in the form of states as people were again tossed into the deep end of another round of economic despair. States, flush with funds from the American Rescue Plan Act signed by President Biden in March 2021. The economic turnaround in the last two quarters of 2021 also helped the states strengthen their finances.

State Stimulus Checks Continue To Go Out

The record inflation that has made life miserable for most Americans, especially in the low and middle-income category, will be mitigated in part by the stimulus checks being sent by the states.

Though the payments are small in comparison to the federal payments, the circumstances are also different as the economy has reopened and people are back at work. It was quite different back in the days immediately after the pandemic when millions of Americans lost their jobs or had their pay curtailed drastically.

Maine and New Mexico led the way with both the state legislatures enabling a quick passage of the bill which enabled Maine to send an $850 stimulus check to individuals and double that to joint filers.

An estimated 858,000 residents will get a total of $729.3 million. Residents should file their 2021 income tax returns by October 31 of this year to be eligible. Those eligible must have a federal AGI of less than $100,000 for single filers, $150,000 for heads of household, and $200,000 for couples filing jointly. They must also not be claimed as a dependent.

In New Mexico, the relief is going out in the form of 2 tax rebates spread over 3 payments. The first two have already been issued, while the final payment will go out in August.

Together the tax rates will pay up to $1,500 to eligible taxpayers. For July $500 will go out to married couples filing jointly, surviving spouses, and household heads with an AGI of $150,000 or below. For single taxpayers with an income of $75,000 or below, the stimulus check will be worth $250.

The second rebate sent by New Mexico is split into two payments, the first part was sent in May and June, while the second part is in August. This part of the rebate has no income restrictions and will be issued as follows. $1,000 to joint filers distributed into two payments, one paid in June and the other payable in August.

Single taxpayers will get $500, split into two payments of $250 each paid in June and again payable in August.

California and Florida are the latest among states to announce stimulus checks though the reach and amount vastly vary among the two states on either side of the political spectrum. While Republican-ruled Florida is sending a $450 stimulus check to around 60,000 residents with children, California will be sending up to $1,050 to residents. Families earning as much as $250,000 if filed jointly will also get a stimulus check though the amount will be lesser.

Georgia will be sending out a $250 stimulus check to individual filers, $375 for household heads, and $500 to families filing jointly. The payments are being sourced from a healthy budget surplus from 2021.

Hawaii is sending out tax rebate checks to people which will be $300 for residents with an adjusted gross income of $100,000 or less. For those earning above that amount, a $100 rebate has been allowed. Governor David Ige said that the state is giving back money to taxpayers to pay for gasoline and other necessities that have seen a substantial price increase.

Indiana will be sending a $125 stimulus check to all residents while frontline workers in Minnesota who qualify will receive a one-off stimulus check of $750.

Delaware is sending out relief rebates to residents with a stimulus check of $300 to residents who have filed their 2020 income tax returns. The payments started in May and will continue throughout this summer.

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