The IRS is no longer sending federal, or Economic Impact Payments after December 2021, the stimulus check support payments that started in 2020 with the onset of COVID-19. The US federal government launched 3 stimulus checks between 2020 and 2021.
The Economic Impact Payment CARES Act was launched in April 2020 as the federal government stepped up to help citizens who were left economically devastated even as the WHO declared COVID-19 a global pandemic. The response of the US government was hesitant initially, but once it got its bearings right it acted swiftly.
A series of lockdowns were put in place by individual states to arrest the spread and as unemployment climbed and economic devastation set in, the federal administration sent the first of the three federal stimulus checks worth $1,200.
The US government again took the initiative in December 2020 with a $600 stimulus check along with $600 more for dependents up to a maximum of three.
But many felt that the second check was insufficient, and it led to the biggest stimulus support initiated by President Joe Biden, the American Rescue Plant Act, signed in March 2021.
The legislation was passed on a partisan basis and was totally opposed by the Republicans. It was the last of the direct payments received by common citizens with earning being the only criteria.
Stimulus Checks Based On The Adjusted Gross Income
The third stimulus check was restricted based on the Adjusted Gross Income (AGI) of individuals, married couples, and heads of household. While individuals earning $75,000 and less received the full amount, the married couples received the full stimulus check for earnings up to $150,000.
From $75,000 to $80,000, the amount of the stimulus checks decreased. The same was in the case of a married couple who filed jointly as the stimulus check amount tapered off between %150,000 and $160,000.
The Adjusted Gross Income was the basis of both the federal and state stimulus checks. The AGI is the gross income of less certain adjustments. The deductibles from gross income include business expenses, student loan interest payments, and several other payments.
Gross income is calculated as the sum of all the money earned in a year by an individual or a married couple in the case of personal income tax. Such earnings include wages, capital gains, dividends, royalties, interest income, capital gains, alimony, retirement distributions, before tax, and other deductions.
But the turn of the year saw the federal support tapering off. Even the remaining 50% of the enhanced Child Tax Credit payments were stopped as Republicans did everything possible within their control to stymie all possible initiatives of Joe Biden.
Inflation too began moving upwards and reach a 40-year high of 8% in March 2022. It led to spiraling costs as gasoline and grocery prices hit record highs.
Glimmer Of Hope In The Form Of State Stimulus Checks
This led to the states coming up with stimulus checks of their own. While some states have already passed legislation on this front, other states are moving to bring in-laws to help their residents.
California was the first state to come up with its version of the stimulus check. The Golden State Stimulus checks I and II helped out residents of California even as the federal stimulus checks came to an end.
The Golden State has continued to enjoy a surplus for the past two years and residents have benefitted from the boon.
California is now moving forward with a gas card of $400 for each car owned by residents. Families can expect cards for a maximum of two cars a family. Residents can expect the cards as early as July.
The Democratic ruling party in Illinois has proposed stimulus checks that will arrive in the bank accounts and mailboxes of residents by September. The check will be worth $100 for adults and a half for children. There is also a proposal to provide a maximum of $300 in property tax relief checks, the suspension of the increase in grocery taxes and gas taxes, and a freeze in supplies to schools for a period of 10 days in August 2022.
Residents of Idaho will get rebate checks worth 12% of their 2020 taxes of $75, whichever is higher.
Residents of New Mexico who have filed their income tax returns for 2021 and have income below $75,000 as individuals are eligible for a one-time stimulus to check worth $250. Married couples who file jointly will receive a stimulus check worth $500.
There are other credit measures offered by the state that includes $1,000 for full-time nurses at hospitals, a refundable child tax credit of a maximum of $175 per child, and a 3-year partial income tax waiver for veterans. There is also an extension proposed for the solar market tax credit that is equal to 10% of qualifying purchases and the cost of installation.
Lawmakers in Indiana have approved an expansion of the $125 stimulus payment offered by the state. over 450,000 low-income residents of the state are eligible.
Governor Brian Kemp of Georgia has recently signed into law stimulus checks for residents. The one-time refund will come to $250 for individual taxpayers and $500 for joint tax filers, while heads of households can expect $375.
Governor Phil Murphy of New Jersey has proposed a one-time stimulus check worth $500to for low earners in the state who filed their returns using the TIN (Tax Identification Number) instead of the regular Social Security Number regular tax filers. This was an effort to include undocumented immigrants in the list of stimulus check beneficiaries.
Legislators in Virginia are working out the details of a $300 one-off stimulus check to all taxpayers in the state. two other proposed bills are set to reduce or even eliminate the grocery tax levied by the state and also suspend the 26.2% gas tax for a year.
Governor Kathy Hochul of New York has proposed a property tax rebate that ranges from $425 to $970 for low and middle-income earners in the state. Additionally, there are tax rebates for businesses, and a suspension of the state tax on motor fuels till December.
Hawaii has already pushed through legislation that will give $300 stimulus checks to taxpayers with earnings below $100,000 and $100 for people earning above that amount.
While the stimulus checks provided immediate relief, economists believe that they may have played a big part in inflation as they put money directly into people’s pockets. So, while they were necessary to prevent a total economic collapse, the influx of more money to spend on goods in the market led to a rise in prices.