Following the signing on Thursday of a $308 billion state budget that contains the payouts, Governor Gavin Newsom said that up to 23 million Californians would get “inflation relief” checks of up to $1,050.
The checks are a component of a $17 billion relief package that also includes a suspension of the state’s diesel fuel sales tax and more funding to assist people with their rent and energy payments, according to Newsom.
The tax refunds that will return a total of $9.5 billion to state citizens will be used to offset the cost of inflation.
The accord comes as Californians pay the highest gas prices in the country, with a gallon of petrol costing an average of $6.27 in the state on Friday, or roughly 29% more than the national average.
Earlier this year, Newsom had suggested giving citizens of the state stimulus payments of $400 for each car, up to a maximum of two automobiles.
However, some members had pushed for a measure that would increase the checks sent to those with lower incomes.
In the statement released on Thursday, Newsom said, “In the face of new difficulties and uncertainty, we’re delivering over $17 billion in assistance to help families make ends meet.”
California citizens may use this “middle-class tax refund calculator” to see how much they are eligible for.
The payouts will surely lessen the burden of increasing gas prices, but they also make people wonder what effect injecting more money into the economy will have at a time when inflation is at a 40-year high.
Economists attribute the present inflation crisis to a mix of supply-chain issues and government stimulus expenditures, such as direct payouts to households and loans to firms.
Here is how California’s strategy will function.
Where does the funding come from?
The cheques, which come from the state’s record-breaking $97 billion budget surplus, are intended to be used as tax refunds.
Who will be eligible for a cheque to offset inflation?
The payouts are based on income, tax-filing status, and family size, much as the federal government’s stimulus cheques.
The largest payouts will go to Californians with lower and medium incomes.
Couples filing jointly who make less than $150,000 annually and single taxpayers making less than $75,000 annually will each get $350.
No matter how many dependents there are, taxpayers will get an additional $350.
In other words, a couple with two kids and a combined income of $125,000 would be eligible for $350 for each adult and $350 for each of their kids, for a total of $1,050.
What about Californians with greater incomes?
Residents with higher incomes will be given lower amounts.
For a total of $750 per family, single taxpayers earning between $75,000 and $125,000 annually and married couples making between $150,000 and $250,000 annually will each get $250 in addition to the same amount for their dependents.
Couples earning between $250,000 and $500,000 yearly and individuals making between $125,000 and $250,000 annually would each get $200, plus the equivalent amount for any dependents.
That is a maximum payout per household of $600.
What about households making above $500k?
According to the Sacramento Bee, individuals and couples with incomes above $500,000 and $250,000, respectively, are not eligible for the benefits.
The checks will be issued when?
The governor said on Thursday that checks might be distributed through direct deposit or debit cards as early as October.