The federal stimulus checks dried up after a series of support measures that started right after the total shutdown in February 2020 and continued through December 2021. While the three rounds of stimulus checks provided eligible households up to $10,000, there were many other stimulus support from the federal administration that included the extended weekly unemployment benefits and the expanded Child Tax Credit stimulus checks.
The stimulus checks were an extension of the social support that the American government has been continuing for decades to support the section of the population who have been incapacitated from earning for reasons of advanced age, disability, and blindness.
But the Social Security and Supplemental Security Income programs are different from the stimulus checks as the latter payments were a measure to stall the immediate economic downturn caused by the pandemic. it was not a long-term measure that is to continue indefinitely nor were the benefits based on earnings.
The Stimulus Checks Achieved Its Objective
It was, as the name indicates, a measure to stimulate the economy. On the one hand, it was a step to prevent people from sinking into poverty, homelessness, and payment defaults, while on the other it helped prevent a long-term recession and total collapse of businesses, and local government bodies including state governments.
Two years down the line it is evident that the stimulus checks, particularly the American Rescue Plan Act achieved exactly that. It staved off a long-term recession. The recession following the pandemic was the shortest on record despite the total collapse of all forms of economic activity for months.
But the constant injection of around $5 trillion in funds directly into the economy for a sustained period has been blamed for contributing to the rising prices. The inflation rate began creeping up at the end of the first quarter of 2021 and reached a 4-decade record in June 2022. The 9.1% rate of inflation at the end of June this year was the highest since November 1981.
The rise in inflation, unfortunately, coincided with the complete end to all forms of stimulus support from the federal administration. The last of any form of federal support ended with the discontinuance of the expanded Child Tax Credit stimulus check in December 2021. It was the same period when the inflation rate took off at an alarming pace.
The rise in prices has led to negative wage gains for millions of workers who despite an increase in post-pandemic income have seen it being negated by the alarming rise in prices.
State Stimulus Checks Only Reprieve For Affected Citizens
With no federal support, the state stimulus checks have proved to be the only support measure for citizens severely affected by the rise in prices across all sections. Prices of gasoline, food and essential items, utility rates, and home rents have seen an unprecedented upward spike for more than a year and there appears to be no end in sight despite the Federal Reserve jacking up lending rates.
Maine and New Mexico were among the first states off the mark with generous relief measures for their citizens. Maine has given a one-time stimulus check of $850 for individual filers earning below $100,000, and double that amount for married couples filing jointly and earning $200,000.
New Mexico spread its stimulus checks over three months varying between $250 and $500. The relief went out in the form of 2 tax rebates. Around 2.4 million rebates were issued by the end of August.
The New Mexico tax rebates were different as they were the result of twin legislations. One was passed during the regular session of the legislature and the second was passed during a special session. Together they have provided up to $1,500 to eligible filers.
The July stimulus checks issued by the New Mexico government went out to taxpayers who filed their 2021 state tax returns and met the stipulated guidelines. Married couples filing jointly and with a combined adjusted gross income of up to $150,000 received $500. Single taxpayers or married filers filing separately with an AGI of up to $75,000 got $250.
California, Florida, and Colorado are the latest among states to declare stimulus checks for their residents. While Florida has declared a $450 stimulus check for around 59,000 of its residents, California has gone all out to support around 23 million people, around 60% of the population of the Golden State.
To qualify for the stimulus check, residents must have filed their returns for 2020 before October 15, 2021, and must have been a resident of the state for at least 6 months in 2020. They must also not be listed as a dependent on someone else’s returns for the same tax year and should be a resident of the Golden State when the payment is issued.
The payments are offered on a sliding scale, based on their filing and income status. The highest payout goes to joint filers earning below $150,000 and declaring at least one dependent. They get $350 each for a total stimulus check of $1,050.
Filers with income of up to $500,000 jointly will also receive a stimulus check, but it will be pared down to $200 each for a total of $600 if they declare at least one dependent.
Florida’s families with kids who fulfilling certain criteria will get a stimulus check worth $450. The payments have been offered to offset the debilitating impact of surging inflation and help them pay for school supplies for the coming year. To be eligible people should meet one of the following qualifications as on July 1. They should be a foster parent or a relative or non-relative caregiver.
Families on welfare or participating in the Guardianship Assistance Program will also get an identical amount. The checks arrived before the sales tax holiday declared by Florida under the ‘back-to-school’ scheme.
The Colorado cashback program gives residents a $1,500 tax rebate for married couples filing jointly and half that amount to individual tax filers. The payment provides the amount for residents who file their income tax returns, and apply for a rebate for their property tax, rent, and heat before end-June, 2022. They will receive the stimulus check by September 30 this year.
