While several states are considering sending stimulus checks or a tax refund to their residents to offset the country’s highest inflation in the past four decades, coupled with rising prices due to supply chain disruptions and the war in Ukraine; Many Americans are wondering whether it is possible for the federal government to issue a new stimulus check or some sort of direct aid.
Analysts had predicted that the pandemic would eventually decimate state budgets; however, states like New Jersey and Connecticut have a surplus that would allow them to provide direct financial aid to their residents, in the form of state tax credits, stimulus checks, or tax refunds. However, aid plans are still on the table of lawmakers.
Other states have also gained economic stability thanks to workers’ paybacks, as well as new income tax revenues, while strong retail sales are increasing sales taxes.
WILL THERE BE DIRECT FEDERAL AID?
But beyond the financial boom in some states, households across the country are wondering if the federal government will offer direct financial aid like that provided during the pandemic.
For now, neither President Joe Biden’s administration nor Congress plans to send out additional stimulus checks for 2022. However, three federal lawmakers are trying to structure a stimulus rebate program in the face of rising gas prices.
The plan of reps Mike Thompson of California, Lauren Underwood of Illinois and John Larson of Connecticut would offer monthly allowances of $ 100 to singles and $ 200 to couples. Families may also charge an additional $ 100 for each dependent they have declared on their tax returns.
“The price of gas is driving up costs across the board. My energy discount proposal will provide much-needed relief by putting the money back in the hands of Americans who feel this pressure.” Larson tweeted on Wednesday.
“Americans are suffering the impact of Vladimir Putin’s illegal invasion of Ukraine and right now we must work together on sensible political solutions to ease the financial burden felt by my constituents,” Thompson said in a statement. Note.
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The income thresholds are similar to those of the third and final stimulus check issued last year: singles earning less than $ 75,000 and couples earning $ 150,000 would qualify for the cash. Singles earning more than $ 80,000 and common filers earning more than $ 160,000 would not receive the help.
Oil prices started to rise about a year ago due to supply chain problems related to the pandemic, and the price problems were exacerbated by the Russian oil import ban in the wake of the war in Ukraine which led to a decrease in oil prices. world supply of oil.
As a result, Americans have been forced to pay some of the highest prices per gallon at the pump. The current national average price of gas is now $ 4.23, more than a dollar higher than the average a year ago, according to AAA.
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For months, lawmakers have pondered the best way to lower gasoline prices, but have not found a solution. Senate Democrats tabled a bill in mid-February to stop charging federal taxes (18.4 cents per fill) at the pump until next year, a proposal that hasn’t generated momentum.
Asked about a gas tax exemption at a press conference on March 31, House Speaker Nancy Pelosi told reporters that gas tax exemption is no longer the best option on the table, since oil companies do not necessarily pass on the savings to consumers, in addition to reducing the funds needed for road maintenance.
Pelosi added that lawmakers are now considering a refund card or direct monthly payment, as part of the 2022 Gas Rebate Act introduced on March 17.
For now, Democrats are working on potential gas discounts, although President Joe Biden is pushing his own plans after announcing the release of an average of more than 1 million barrels of oil per day from the strategic oil reserve over the next six. months. one third of the total reserve.
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Biden warned that “there is no definitive answer”. He also said that prices could drop as low as 35 cents a gallon, but “it’s not known at this point.” The president added that it also depends on how many barrels of oil allies around the world release from their reserves.
AND THE BUDGETS OF THE STATE?
Americans are more likely to receive direct aid from states than from the federal government. For now, five states, including Connecticut, have introduced tax breaks for their residents, while the Gas Rebate Act of 2022 has been signed by three governors.
Republican Governor Brian Kemp of Georgia has signed legislation to send checks up to $ 500 to residents of the state. The reason, he said in a statement, is to mitigate the impact of inflation on household budgets and also to provide direct relief amid a record state budget surplus.
In Maine, Governor Janet Mills is trying to send $ 850 checks to each resident to offset inflation, including high gas prices, one of the most generous deals in the country.
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On the other hand, Republican Governor Phil Scott of Vermont proposed to return half of a $ 90 million surplus in the State Property Taxpayer Education Fund through repayment checks of $ 250 and $ 275, although the Democratic-controlled legislature does not seem to support the measure.
In California, Democratic Governor Gavin Newsom plans to send direct payments of $ 400 per vehicle to state residents, with a limit of two vehicles. However, the green light now rests with lawmakers.
Democratic Governor Michelle Lujan Grisham of New Mexico has signed a law to provide reimbursement checks of $ 250 for single taxpayers and $ 500 for married couples who apply jointly.
Additionally, Democratic Governor Tim Walz plans to invest the state budget surplus in discount checks of $ 1,000 per pair.
Indiana residents will receive $ 125 each after filing taxes in 2022 due to higher-than-expected tax revenues
WHAT ARE THE TRI-STATES OF NEW YORK, NEW JERSEY AND CONNECTICUT IN PLACE?
NEW JERSEY
Governor Phil Murphy of New Jersey and the Democrat-led legislature included cash checks of up to $ 500 to about 1 million households as part of a budget deal last year, as the governor and lawmakers were ready for elections .
Now, the legislator is considering a second plan that would offer $ 500 checks that would be handed out to tax-paying immigrants using an individual taxpayer identification number (ITIN).
According to the state Treasury Department, more than 100,000 immigrants in the state (although state officials estimate that up to 80,000 families would benefit) meet the criteria for one-time payments; however, the Joint Budget Oversight Committee must first approve the use of these funds from the American Rescue Plan. Here we explain more.
For now, New York is offering aid to low-income New Yorkers under a $ 64 million federal funded program to help with the cost of diapers for families in need, food expenses for families with children and adults. and provide housing and moving assistance for survivors of domestic abuse.
But New Yorkers are still waiting for the state budget for fiscal year 2023, which could be reconciled Thursday after a week of delay.
In her fiscal year 2023 budget plan, released earlier this year, Governor Kathy Hochul proposed a $ 1 billion property tax discount to offset some of the financial burdens New Yorkers face. with rising inflation. The program returns tax dollars to low- and middle-income families, with low-income families and seniors receiving higher benefits. Open here for more details.
CONNECTICUT
The Tax Drafting Committee voted on Tuesday not only for tax cuts to help families with children, it also decided to increase the state’s earned income tax credit, which is specifically intended to provide a strong boost. economic to low and moderate income workers. The tax benefit would increase to 41.5%, starting from the current calendar year 2022.
The committee also decided to create a children’s tax credit in Connecticut for the first time, which would provide a maximum of $ 600 per year for families with up to three children.
The credit would be available to single parents earning up to $ 100,000 per year and married couples earning up to $ 200,000 per year.
For years, Connecticut had no state earned income credit as Republicans and several governors opposed it, although that changed in 2011 under then-Governor Dannel Malloy. Click here for more detailed information.
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