While several states are considering sending stimulus checks or a tax refund to their residents to offset the highest inflation in four decades in the country, coupled with rising prices due to disruptions in the supply chain and the war in Ukraine; Many Americans are wondering if it is possible for the federal government to issue a new stimulus check or some kind of direct aid.
Analysts had predicted that the pandemic would eventually decimate state budgets; However, states like New Jersey Y Connecticut they enjoy a surplus that would allow them to provide direct financial assistance to their residents, whether as state tax credits, stimulus checks, or tax refunds. However, the aid plans are still on the discussion table of the legislatures.
Other states have also gained economic stability thanks to workers getting their jobs back, plus new income tax revenue, while strong retail sales are boosting sales taxes.
WILL THERE BE DIRECT FEDERAL AID?
But beyond the financial boom in some states, families across the country are wondering if the federal government will offer direct financial aid like that delivered during the pandemic.
For now, neither the administration of President Joe Biden nor Congress plans to send more 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 by Representatives Mike Thompson of California, Lauren Underwood of Illinois and John Larson of Connecticut would offer $100 monthly checks to single filers and $200 to couples. Households could also claim an additional $100 for each dependent they claimed on their tax returns.
“The price of gas is driving up costs across the board. My energy rebate proposal will bring much-needed relief by putting money back in the hands of Americans who feel this pressure,” Larson tweeted Wednesday.
“Americans are feeling the impact of Vladimir Putin’s illegal invasion of Ukraine, and right now we must work together on common sense political solutions to ease the financial burden felt by my constituents,” Thompson said in a statement. release.
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The income thresholds are similar to those of the third and final stimulus check issued last year: Single filers earning less than $75,000 and couples earning $150,000 would qualify for the cash. Singles making more than $80,000 and joint filers making more than $160,000 would not get the help.
Oil prices began rising about a year ago due to supply chain issues related to the pandemic, and price problems have been exacerbated by a ban on Russian oil imports in the wake of the war in Ukraine that resulted in a decrease in world oil supply.
As a result, Americans have been forced to pay some of the highest prices per gallon at the pump. The current national average gas price 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 been pondering the best way to lower gasoline prices, but haven’t come up with a solution. Senate Democrats introduced a bill in mid-February to stop charging federal taxes (18.4 cents per fill) at the pump until next year, a proposal that generated no momentum.
When asked about a gas tax exemption during a press conference on March 31, House Speaker Nancy Pelosi told reporters that the gas tax exemption is no longer the best option on the table, since the oil companies do not necessarily transfer the savings to consumers, in addition to reducing the funds needed to maintain the roads.
Pelosi added that lawmakers are now considering a rebate card or direct monthly payment instead, as part of the Gas Rebate Act of 2022 introduced on March 17.
For now, Democrats are working on potential gas rebates, though President Joe Biden is pushing his own plans after announcing the release of an average of more than 1 million barrels of oil a day from the strategic petroleum reserve over the next six months. months, a third of the total reserve.
We explain some of these benefits.
Biden warned that “there is no firm answer.” He also said prices could drop as much 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.
WHAT ABOUT STATE BUDGETS?
Americans are more likely to see direct aid from the 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 Gov. Brian Kemp of Georgia signed legislation to send checks of up to $500 to state residents. The reason, he said in a statement, is to mitigate the impact of inflation on household budgets, as well as to provide direct relief amid a record state budget surplus.
In Maine, Governor Janet Mills is seeking 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 has proposed returning half of a $90 million surplus in the State Education Fund to taxpayers of state property through $250 and $275 rebate checks, although the Legislature, controlled by Democrats, does not seem to support the measure.
In California, Democratic Gov. Gavin Newsom plans to send direct payments of $400 per vehicle to state residents, capped at two vehicles. However, the go-ahead now depends on lawmakers.
Democratic Gov. Michelle Lujan Grisham of New Mexico signed legislation to provide $250 refund checks for single taxpayers and $500 for married couples filing jointly.
Also, Democratic Gov. Tim Walz plans to invest the state’s budget surplus in rebate checks of $1,000 per couple.
Indiana residents will receive $125 each after they file their taxes in 2022 due to higher-than-projected tax revenue
WHAT ARE THE TRI-STATE STATES OF NEW YORK, NEW JERSEY AND CONNECTICUT POSING?
NEW JERSEY
Governor Phil Murphy of New Jersey and the Democratic-led legislature included cash checks of up to $500 to about 1 million families as part of a budget deal last year, as the governor and lawmakers were primed for election. .
Now, the Legislature is considering a second plan that would offer $500 checks that would be delivered to immigrants who pay taxes 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 up to 80,000 households would benefit) meet the criteria for the 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.
NEW YORK
For now, New York is offering relief to low-income New Yorkers as part of a $64 million federally funded program aimed at helping with the cost of diapers for struggling families, food expenses for households with children and adults elderly, and provide housing and relocation assistance for survivors of domestic abuse.
But New Yorkers are still awaiting the state budget for fiscal year 2023, which could be reconciled on 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 rebate to offset some of the financial burdens New Yorkers face as inflation rises. . The program returns tax dollars to low- and middle-income households, with low-income households and seniors receiving higher benefits. Open here for more details.
CONNECTICUT
The Tax Drafting Finance Committee voted Tuesday not only for tax cuts to help families with children, it also agreed to increase the state earned income tax credit, which is specifically intended to provide a strong economic boost to low- and moderate-income workers. The tax benefit would increase to 41.5%, starting with the current calendar year 2022.
The committee also agreed to create a child tax credit for the first time in Connecticut, which would provide a maximum of $600 per year for households 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 did not have a state earned income credit as Republicans and several governors opposed it, though that changed in 2011 under then-Gov. Dannel Malloy. Click here for more information.