As stimulus checks begin in California, what you need to know

Major General Al-Tayeb | Digital Vision | Getty Images

As many as 23 million Californians are about to receive a tax refund of up to $1,050, thanks to the one-time stimulus payments that Golden State began publishing Friday.

The payments, totaling $9.5 billion, represent the largest program of its kind in the state’s history.

The initiative called middle class tax refundcomes as inflation reached the national level Historic heights. California had a file A surplus of $97.5 billion It finished its budget including payments earlier this year.

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“We know it’s expensive right now, and California is putting money back into your pockets to help,” California Governor Gavin Newsom, a Democrat, said. He said in a statement.

“We send refunds of over $1,000 to help families pay for everything from groceries to gas,” he said.

Who qualifies for a refund?

To qualify to receive a payment, you must meet certain requirements.

You must have been a California resident for six months or more in the 2020 tax year and be a current resident of the state.

California Governor Gavin Newsom and Mayor Libby Schaff of Oakland, California, at a news conference on May 10, 2021 in Oakland.

Justin Sullivan | Getty Images News | Getty Images

You must have filed your 2020 tax return by October 15, 2021, and have adjusted your gross income within the required limits.

In addition, you should not be claimed as an affiliate by another person.

How much money will I get?

Payments to eligible couples who apply jointly may range from $400 to $1,050.

Eligible individuals may receive $200 to $700.

The amount of the checks depends on two factors: income and the number of dependents.

The most generous amount – $1,050 – goes to married couples who file a joint application with an income of $150,000 or less and a dependent. Spouses in this income category will receive $700 if they do not have dependents.

When will the checks come out?

Payments will be issued between this month and January.

Direct deposits will be sent to residents who have submitted their 2020 government returns electronically and received a refund from the state via direct deposit. About 90% of direct deposits are expected to be issued in October as of Friday.

Further payments on mailed debit cards will be issued starting later this month.

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Will the payments cause inflation?

California isn’t the only state using one-off rebates amid budget surpluses. Florida, for example, sends $450 for some families with children.

The big question raised by the checks sent by California and other states is whether they will exacerbate inflation.

While California ‘on the net will come out on top’, it may be affected by inflation that other states release with refunds, Harvard economics professor Jason Furman Tweet recently.

“Californs will be behind on any ‘inflation relief’ payments made by Florida and other states,” he wrote.

Countries are running record surpluses and many individuals are struggling with extremely high inflation.

Jared Walchuck

Vice President of State Projects at the Tax Corporation

While states have been posting one-off payments all year, there has been a spike as Election Day approaches, noted Jared Walchuck, vice president of state projects at the Tax Foundation.

“Countries are running record surpluses and many individuals are struggling under the weight of very high inflation,” Walchuck said.

This prompts policy makers to combine the two and want to write checks.

“Unfortunately, it only increases inflation by pumping more money into an overheating economy,” Walchuck said.

He said tax cuts would be a better alternative to the extra long-term revenue. He said if states were instead looking at one-time money, it would be better to spend it on one-off needs, such as pensions or rainy-day funds.

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