4th stimulus checks to help fight inflation? Federal and state aid can come – Forbes Advisor


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If you’re feeling the squeeze from higher prices at the grocery store or at the gas pump, relief for your wallet could be on the way. Federal and state legislation has been introduced (and in some cases already passed) to send rebates or stimulus checks directly to Americans.

Unlike previous pandemic relief measures, however, these payments are much more targeted and with considerably lower dollar amounts. It is not because governments have developed a miserly streak. Rather, it is about helping Americans ride out rising prices without making inflation worse.

“Plans focused on specific sectors or groups, such as gas cards or disbursements based on income thresholds, could in theory help alleviate the pain caused by the prices of specific goods or services… without putting as much pressure on prices more generally,” says Andrew Patterson. , senior international economist at Vanguard.

Here’s how different governments, from the federal to the state level, are seeking relief for taxpayers in a world of rising prices.

Federal energy rebate payment of $100 per month

On March 17, Representatives Mike Thompson (D-CA), John Larson (D-CT), and Lauren Underwood (D-IL) introduced the Gas Reimbursement Act of 2022. In its early stages, the law would send energy rebate payments of $100 per month to eligible taxpayers and offers an additional $100 per dependent.

Currently, payment eligibility would be structured in the same way as previous stimulus payments. Married filers filing jointly with incomes up to $150,000 and single filers earning up to $75,000 would receive full payment, with phase-out levels for higher incomes.

The legislation must make its way through Congress before payments can begin.

Approved government stimulus and rebate check programs

Six states have already approved legislation to obtain tax refunds for their residents. Here’s how those payouts work:

Georgia

Thanks to a historic state budget surplus, Georgia residents who have filed their 2021 and 2022 tax returns will be eligible to receive refunds based on their tax status:

  • Single registrants: $250
  • Head of household: $375
  • Joint joint deposit: $500

Residents who filed their taxes before Kemp signed the legislation will receive their refunds via payments to be sent at a later date. Those who have not yet filed and who have done so before the April 18 deadline may have their refunds added to their tax refunds. Of course, that depends on how quickly the state revenue department can integrate the new payments.

Idaho

In February, Idaho Governor Brad Little signed a bill that provides $350 million in tax refunds to Idahoans. There are two eligibility criteria:

Payments are queued to begin at the end of March and will total $75 or 12% of your 2020 Idaho state taxes, whichever is greater. The tax commission will first issue refunds to taxpayers who received refunds by direct deposit, and then issue paper refund checks. State residents can also check the status of their refund online.

Indiana

Like Georgia, Indiana ended up with a healthy budget surplus at the end of 2021. In December 2021, Governor Eric Holcomb announced that Indiana taxpayers would get a one-time $125 tax refund after have filed their 2021 taxes.

While residency and eligibility information is unclear, the state Department of Revenue says taxpayers shouldn’t expect to see this bonus refund reflected when they file their taxes (so don’t). don’t panic). Instead, the state will send further information on when to expect these bonus payments in 2022.

Maine

Governor Janet Mills signed a supplementary budget April 20 to authorize direct relief payments of $850 for Maine taxpayers. Full-time residents with adjusted federal gross income of less than $100,000 ($150,000 if filing as head of household, $200,000 for couples filing jointly) are eligible.

The one-time payments, which are funded from the state surplus, are expected to be delivered by post from June 1. The budget also includes an increased benefit for recipients of Maine’s Earned Income Tax Credit (EITC).

New Jersey

In the fall of 2021, Governor Phil Murphy and the New Jersey State Legislature approved budget measures that would send one-time rebate checks of up to $500 to nearly one million families.

Now Murphy is proposing to earmark an additional $53 million to send $500 payments to those who file taxes using a tax ID number instead of a Social Security number. These newly eligible individuals would include nonresident and resident aliens, their spouses and dependents, who are not eligible to receive a Social Security number.

New Mexico

In early March, Governor Michelle Lujan Grisham signed law relief measures that would give New Mexico taxpayers a one-time tax refund of $250 for single filers and $500 for married couples filing jointly. To be eligible, taxpayers must meet certain criteria; single filing income must be less than $75,000 and married filing must be less than $150,000.

Gas rebate and state stimulus programs pending

Although yet to be approved by their state legislatures and enacted into law, nine states have introduced legislation on gas rebates, direct stimulus check payments, commodity tax cuts food and income tax refunds for their residents.

California

With gas prices soaring on the West Coast, Governor Gavin Newsom has offered up to $9 billion in funds to send gas rebates to Californians. Although the measure still has to go through the state legislature, California residents could see payments as early as the summer if the measure passes.

Eligibility for California payments would be based on vehicle registration instead of tax returns and income thresholds. This feature was intentional so that low-income residents would qualify for the gas rebate. Households would be eligible for rebates for up to two cars ($400 per car). If approved, residents will receive a debit card for the amount of their gas rebate.

Hawaii

In January, Governor David Ige proposed sending a $100 tax refund to each Hawaiian taxpayer, with an additional $100 payment per dependent. Details of eligibility and payment timing are still unclear as this measure is still working its way through the Hawaii state legislature.

Kansas

With one of the highest grocery taxes in the country, the Kansas state legislature is considering a bill that would lower its 6.5% tax on groceries. There is no specific date when this legislation could be decided or when a tax cut would come into effect.

Kentucky

The Kentucky Senate approved a $1 billion rebate for state taxpayers from the state budget surplus. While legislation is still pending in the state legislature in conjunction with a broader income tax package, eligible Kentuckians will receive a one-time payment of up to $500 and up to $1,000 per household if approved.

Minnesota

Governor Tim Walz has proposed using the state’s $9.25 billion budget surplus to fund a generous relief program, proposing that Minnesotans receive tax refund checks of $500 per person. Lawmakers have yet to quite approve it and could face an uphill battle in the state’s divided legislature. Republicans want to use the budget surplus for permanent tax cuts for everyone, while Democrats want the funds to benefit low-income residents the most.

New York

Governor Kathy Hochul’s proposed new budget offers New York residents some relief through a property tax rebate proposal. Outside of New York, owners would receive an average rebate of $970, while New York City owners would receive average rebates of $425. The final agreement on the state budget has a deadline of March 31. After this date, details on eligibility and payments will likely become clearer.

Pennsylvania

The state’s hotly contested gubernatorial race means there are multiple proposals floating around Pennsylvania to help curb inflation by cutting the 57.6-cent-per-gallon gasoline tax from the State. While this political race unfolds, current Governor Tom Wolf has called on Congress, along with several other Democratic governors, to repeal the national gasoline tax of 18.4 cents per gallon until the end of 2022.

Pennsylvania also has pending legislation that would provide up to $500 million in direct assistance to help families with expenses such as childcare and household expenses.

Virginia

With a budget surplus of $2.6 billion, Governor Glenn Youngkin has advocated putting some of that money back in the pockets of Virginians. There are two bills in the state legislature to reduce or eliminate the state’s 2.5% grocery tax. Additional legislation seeks to suspend the state’s 26.2 cents per gallon gasoline tax for a period of one year.

What’s next for gas stimulation checks?

Even with all of these measures making their way through various legislatures, Americans remain stuck between what they need and what they can afford.

And while rebates and gas stimulus checks can help cushion the blow of rising prices, there are those who remain reluctant to send in additional payments, especially with past pandemic relief programs that would have contributed to our current inflation rate.

Dr. Jaime Peters, assistant dean and assistant professor of finance at the University of Maryville, explains that for some lawmakers, “inflation-linked stimulus payments will simply feed the beast”, putting even more money on the market where the supply of goods cannot meet demand.

This creates a conundrum for families who lack the funds to obtain the goods they need every day.

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