This year has turned out to be marked by a total absence of fresh federal impetus to support citizens even as inflation played havoc with finances. Prices of essential goods from groceries to gasoline touched record highs and the absence of stimulus checks has only added to the woes.
The abrupt rise in inflation rates that reached alarming figures by the turn of the year coincided with all forms of stimulus checks from the federal administration. The expanded Child Tax Credit stimulus check ended in December 2021. The only major stimulus money that the federal administration owed citizens was half of the CTC stimulus checks payable after parents filed their 2021 income tax returns.
Although most beneficiaries have claimed their stimulus checks and other benefits announced by the administration, over 9 million people are yet to claim their dues. The Internal Revenue Service has sent out a letter reminding them to collect their due by filing a return before November 15 or lose out on the benefits.
The successive stimulus checks had helped millions of Americans deal with the post-pandemic slump in the economy as massive unemployment and shutdown of industries pushed the economy to the brink of a prolonged recession.
The stimulus checks saved millions from starvation, saved them from credit and mortgage defaults, and helped people from turning homeless.
Prices have continued to soar as year-to-year inflation remains above the 8% mark and shows no signs of going back to the pre-pandemic levels.
States Rely On Federal Funds To Support Residents In Absence Of Federal Support
With the Republicans relying on partisan politics in an election year and refusing to yield further support to citizens, the states are being forced to rely on their resources to help out citizens. For the first time in decades, Americans have recorded negative growth in wages in real terms as the 3.5% increase in wages, which would have been termed healthy in normal times, has been negated by the 8% plus the rise in the inflation rate.
This has led to negative earnings and people have been forced to either spend their savings or rely on borrowings for even basic needs. Credit card debts that had plunged after the stimulus checks and other federal support like the child tax credit have once again peaked.
These high-interest instruments like credit cards are further pushing people into a debt trap. Around 20 states have moved in and one of the biggest support has been started by California under the Democratic Governor Gavin Newsom.
Gov. Newsom had initially proposed a gas rebate card worth $400 for each card registered in California with families eligible for a maximum of two cards. But he was persuaded by Democratic members of the legislature to come up with a more comprehensive measure.
The California Middle-Class Stimulus Check Rolls Out This Quarter
The Middle-Class Tax Rebate is expected to provide relief to 23 million residents and Gov. Newsom has fallen back on the $97 billion state reserve surplus for 2021 to set aside around $17 million out of the annual budget of $308 billion for various support measures related to inflation.
Resident individuals and households will get between $200 and $1,050 depending on the filing status, their adjusted gross income for 2020, and the inclusion of dependents in the income tax filing.
The payments have been broken up into three tiers with individuals earning up to $75,000 and a married couple filing jointly and an AGI of up to $150,000 receiving $350 for each filer. Filers declaring a dependent in this tier will get $350 more, irrespective of the number of dependents. So a joint filer with dependents can expect to collect a stimulus check of $1,050, the maximum possible, with $350 for each filer and $350 more for the dependent.
The second timer is for individual filers with an adjusted gross income for 2020 between $75,001 and $125,000. They will get $250 while joint filers with an AGI between $150,001 and $250,000 will get double that. As with the earlier tier, any individual or joint filer who includes any dependent will get $250 more.
The highest tier is for individual filers with a 2020 AGI between $125,001 and $250,000 who will get $200 while joint filers earning between $250,001 and $500,000 will get the same amount. The rule for dependents also applies here and they will get $200 more.
People who have been claimed as a dependent for the 2020 income tax filing are not eligible for individually claiming a stimulus check. Individuals with an AGI above $250,000 and joint filers with a combined AGI of more than $500,000 are not eligible for the Middle-Class Tax Refund.
Only filers who have filed their 2020 income tax returns before October 15, 2021, are eligible for this third round of stimulus checks offered by the California government under Governor Newsom. The only exception to this date is for people who have applied for an Individual Taxpayer Identification Number and did not receive it on or before October 15, 2021.
Potential beneficiaries must also be a resident of the Golden State for 6 months or more in 2020. They must also be a resident of California on the date the stimulus check is issued.
An online estimator is provided by the administration at https://www.ftb.ca.gov/about-ftb/newsroom/middle-class-tax-refund/middle-class-tax-refund-estimator.html to help people determine the amount they can expect under the Middle-Class Tax Refund.
The tool provides only an estimated amount and is based on the information that the filer has provided to the tool. The actual stimulus check amount may vary based on the information that the filer may have provided on their 2020 income tax return filed in 2021 before October 15.
Residents who receive Round I or II of the Golden State stimulus check payments were the first to receive the stimulus check through direct account transfer. Residents who filed online are next in line to receive direct transfers.
Filers who filed offline through paper returns or residents who have either changed their banker or their account number will receive the payment through a debit card mailed to the address entered in the tax return. Any change of address should be notified to the authorities to receive the debit card.
The payments are to continue till January 14, 2023, though the Franchise Tax board has said that almost 95 % of the payment are expected to be completed by November.
