Inflation reached historic levels in the US in 2022, beating a 40-year-high. And with it came an unprecedented rise in the price of goods ranging from groceries to gasoline. The services sector was equally affected. People struggled to manage with existing wages as the value of the dollar plummeted and continued on this course for a year. The absence of any federal stimulus checks makes the situation more difficult.
The low and moderate-income people were naturally the hardest hit. For the first time, people were faced with the prospect of a negative rise in wages. Despite a healthy rise in wages after the pandemic of up to 3.5% on average, the rise in prices was way more leading to people facing the prospect of a drop of around 5% om wages.
Inflation remained constant above the 8% mark throughout the year and even crossed the 9% mark in June 2022, the highest since November 1981. The federal administration was tied down by an unmanageable opposition that refused to allow any stimulus checks beyond 2021.
The expanded version of the Child Tax Credit stimulus check proved to be the last of the federal stimulus checks and the monthly checks ended in December 2021. The only federal support for 2022 was the balance of the CTC stimulus check that was adjusted against the 2021 income tax return.
While the federal stimulus checks ended in 2021, federal support was apparent in the state stimulus checks that came as an alternative relief for people tied down by rising prices. The American Rescue Plan Act signed by President Biden in March 2021 within weeks of coming to power allocated billions to states, and local and tribal bodies to tide over the pandemic-linked economic crisis.
The funds from the Rescue Plan were used by the states to fund stimulus checks, tax rebates, gas and transit cards, and sales tax waivers for residents across the US. Over 20 states moved in with some form of support and the stimulus checks have continued into the first quarter of 2023.
While states such as Maine and New Mexico were first off the mark in the first two quarters of 2022, California was among the states that timed their stimulus check to coincide with the festive season.
The payments from such states have continued into 2023 and a few are planned for February. Other isolated schemes have been started for particular demographic groups and some have been testing cases to assess the efficacy of such support.
California Stimulus Checks Continue Into February 2023
The California Middle-Class Tax Rebate was among the most elaborate of the stimulus checks and sent out a third round of stimulus checks to around 23 million residents. That is close to 60% of the total population of the Golden State.
This is the third round of payments initiated by Governor Gavin Newsom after the Golden State Stimulus Check I and II. The Middle-Class Tax Rebate was initially planned as a gas card worth $400 for every vehicle registered in California. Families were to be given a maximum of two cards. Families and individuals not owning cards were in line for a transit card worth the same amount.
But Democrat state legislators prevailed upon Governor Newsom to change his plans and include a third round of stimulus checks. Though the plan was passed under the state budget for 2022 in June, the stimulus check payments for the Middle-Class Tax Rebate were paid out only in the last quarter and continued into the festive season.
Residents received between $200 and $1,050 depending on several factors, including their Adjusted Gross Income for 2020. Tax filers who submitted their income tax returns by October 17, 2021, were eligible for the Middle-Class Tax Rebate.
Residents with a 2020 AGI above $250,000 as individual filers and above $500,000 as joint filers were not eligible for any amount under the inflation stimulus check from the California government.
While the direct payments to residents’ accounts have been completed by December, debit card payments have been delayed and the initial scheduled date of completion was January 14, 2023. That has been pushed back once till January 31, 2023. But many payments remain and the payments are expected to continue through February 2023.
Other States Continue With Some Form Of Stimulus Checks
Idaho has also approved stimulus payments that are worth up to the greatest of the 2020 tax liability of resident tax filers, or $300 for single filers and $600 for married couples filing jointly. The state has not completed the scheduled payments, and they are expected to continue through March 2023.
New Jersey is sending out its version of stimulus checks as property tax rebates. Homeowners with an AGI of $150,000 are entitled to a rebate of $1,500. Those earning between $150,000 and $250,000 will get a stimulus check of $1,000.
Renters will also qualify for a rebate of $450 if their income is within the $150,000 limit. The payments are scheduled to come in during the first quarter of 2023, and residents can be assured that they will be in hand by the time the second quarter sets in.
Pennsylvania has approved a payment of $650 maximum last year. But new residents will qualify for additional rebates that total up to a sum of $975. These payments are limited to old renters, disabled residents, and homeowners. Residents had to claim the amount by 2022 though the associated payments will come in the first quarter of the new year.
South Carolina also approved a rebate stimulus check that could be worth up to $800 late last year. Those who have filed their income tax returns before October 17 should have received their amount already. However, filers who applied after the deadline will have their payment delayed and should receive it only by March 2023. But the payment will come in only if they have filed their income tax returns by February 15, 2023.
So far there are no plans to issue any federal stimulus checks in 2023.
But it does not mean that more Americans can expect some form of stimulus check in the second quarter of 2023.