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Wednesday, August 10, 2022

Stimulus Checks For American Families And Workers: States Step In For Inflation-Hit Americans Following A Pause In Federal Support

It has been over a year since the last federal stimulus checks began landing in bank accounts across the country. The turn of the year saw further stimulus support hit the pause button as Federal politics took precedence over the needs of ordinary citizens. And a recent survey reveals that 81% of Americans are worried about another decline in the US economy even as inflation hits a 4-decade high.

People are still getting over the shock of how swiftly a disaster such as a pandemic can bring an economy to its knees. People who were never laid off before COVID-19 now realize that it could easily head into another economic decline.

COVID-19 And The Federal Stimulus Checks

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Early on, the Treasury Department recognized that the COVID-19was an unprecedented health and economic crisis that was creating a variety of challenges for families across the US. It changed the way we worked and lived. It provided critical assistance to individuals and families and ensured that people could at least keep their families safe and fed, if not thriving, at work and home.

The three rounds of direct stimulus checks were sent out rapidly by the IRS, the Treasury Department, and the Bureau of Fiscal Services. Starting in March 2020, the CARES Act provided stimulus checks of up to $1,200 per adult for eligible individuals and $500 for each qualifying child below the age of 17.

Individual citizens earning below $75,000 earn the full benefits, and it is phased out with an increase in earnings above that amount. For married couples, the limit was $150,000. So a family of four received stimulus assistance of up to $3,400 in direct financial relief.

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The Tax Relief Act enacted in December of the same year authorized additional payment of $600 max to eligible adults and an identical amount for qualifying children under 17 years. The threshold at which the payments were reduced was identical to the CARES Act.

The American Rescue Plan Act of March 2021 was the broadest stimulus support initiative by the federal department. It provided stimulus checks of up to $1,400 to eligible individuals and double that to married couples filing jointly. Additionally, all qualifying dependents, adults, and children, received an equal amount from the federal government.

The American Rescue Plan was expanded to include the enhanced Child Tax Credit (CTC) for better assistance to families with children. It was targeted to reduce child poverty through supplemental earnings for families receiving the tax credit and making the stimulus checks available to a broad number of additional families.

The amount of the CTC payments was increased from $2,000 to $3,600 for a child aged under 6 and $3,000 for other eligible children under 18. While citizens received 50% of the amount through 6 monthly stimulus checks between July and December 2021, the balance has been stopped due to bickering between the ruling and the opposition parties in Congress.

States Step In As Federal Stimulus Checks Hit The Pause Button

With inflation hitting an all-time high in March 2022, several states decided to step in to avoid another economic crisis similar to the one-two years ago. Nine-tenths have said that they have been faced with another crisis as prices for essential items increased, with gasoline and groceries beyond the reach of many.

The average price of gasoline has risen way above the $4 mark per gallon, with crude prices rising to over $110, a rise of over 66% from over a year ago, partially a result of the war in Europe.

While it is an annoyance to middle and high-income groups, even a marginal increase can mean hunger and leave them making difficult choices.

Responding to the immediate needs of many low and middle-income families, the state governments have stepped up and are pledging stimulus checks to their residents.

With several states having already passed legislative measures to ensure state stimulus checks for their residents, people could be in for additional support starting June 2022.

California was the first state off the mark and sent two stimulus checks to its residents, Golden State Stimulus Check I and II, supported by two years of high budget surplus. Residents could get further relief from the zooming gas prices as Gov Gavin Newsom has proposed sending debit cards worth $400 per car to each family with a limit of $800 per family, with the cards slated for July 2022.

The Georgia Department of Revenue has revealed that residents who have filed their returns for the past two years are eligible for a state tax rebate. Gov. Brian Kemp revealed that the payments are being approved for residents of the Peach State from the surplus enjoyed by the revenue department. While single filers will get $250, a married couple filing jointly will receive double that amount.

Residents of Hawaii earning below $100,000 will receive a $300 stimulus check while others will get $100. The payments are intended also for dependents with a family of four getting up to $1,200.

Idaho’s residents will get 12% of the tax filing in 2020 or $75, whichever is greater. The rebates will go out to both filers and dependents. Payments have already started in March and those who receive their refunds through direct transfers will receive them first.

Illinois has already approved a state budget to provide a $100 stimulus check per adult and half that for dependents by this fall. There is a further moratorium on grocery taxes, a $300 relief in property tax, and a 10-day freeze on sales tax for school supplies.

Indiana’s residents who filed their 2020 returns before January this year will get a $125 stimulus check for individuals and double that amount for married couples filing jointly.

Maine has among the most generous support payments for its residents, with Gov. Janet Mills approving a one-off stimulus check of $850 to full-time residents earning below $100,000 as individuals, $200,000 as married couples, and $150,000 as head of households. Residents who file their 2021 return before October 31 will be eligible even if they owe tax money.

New Jersey has announced a one-off payment of $500 for families. New Mexico residents have several refunds coming their way this year. Residents who filed their 2021 returns and earned less than $75,000 as individuals will receive a payment of $250. 

A married couple earning below $150,000 will get a $500 stimulus payment. People can also expect additional stimulus payments of $500 and $1,000 in two separate installments to be released in June and August.

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