Some states in the United States are taking steps to distribute tax rebates that resemble stimulus checks, offering a means to counterbalance the effects of inflation for their residents. While these state-level payments may not match the scale of the federal COVID-19 stimulus checks, they have nonetheless brought much-needed relief to households facing financial constraints.
Often linked to individuals’ income levels as indicated on their 2021 tax filings, these rebates generally fall within the range of a few hundred dollars. However, some households can receive even larger sums, surpassing $1,000. In the year 2022, state stimulus checks were quite prevalent, to the extent that they sparked some disagreements with the IRS earlier in the current year.
State Tax Rebates Ongoing Stimulus Efforts
However, this trend has somewhat subsided. The limited number of states presently issuing these rebates underscore the persistent economic challenges posed by COVID-19 and the ongoing inflation, which has exceeded the optimal 2% threshold. Governors of these states have also pointed out their states’ favorable fiscal positions as a rationale for these disbursements, noting their decision to channel surpluses back to their residents.
Although most states have concluded their issuance of stimulus checks, let’s delve into a mid-year update on tax rebates from five states where this practice is still ongoing:
Alabama Initiates Distribution of $150 Rebates to Commence in November. In the upcoming month, Alabama is set to reduce its grocery tax from 4% to 3%, driven by a surplus of $2.8 billion in its Education Trust Fund. To address the increased grocery taxes paid by its residents during the accumulation of this surplus, the state will provide rebates of $150.
Close to 2 million residents who have filed their 2021 tax returns are eligible for these rebates
Montana Inhabitants Receiving Income Tax Reimbursements, Reaching as High as $1,250 for Those Who Filed 2021 Tax Returns. Initiated the previous month, the state’s distribution of rebates is anticipated to conclude mostly by August 31. This financial relief stems from a surplus in the budget, with Governor Greg Gianforte noting, “Montanans overpaid their taxes, and we’re giving it back.”
Additionally, homeowners in Montana have the potential to qualify for supplementary property tax refunds, potentially reaching up to $675. However, individuals must submit an application to access these funds. The window for filing opened on August 15 and is scheduled to conclude on October 1.
New Mexico’s $500 Rebate Checks Reached Taxpayers in June, Calculated According to 2021 Filings. While the majority have already obtained their rebates, residents still have the opportunity to file their taxes for that year and secure the funds. State authorities have clarified that these rebates intend to assist residents in managing the challenges posed by inflation. Surpassing revenue records prompted the approval of these rebates, with over 900,000 taxpayers in New Mexico benefiting from this initiative.
Minnesota Offers $260 Rebates to Individuals Earning Under $75,000 in 2021, with Distribution Commencing This Week. The primary goal of these rebates is to tackle the economic difficulties faced by Minnesotans in connection with the pandemic and inflation, as reported by MPR News. Households eligible for these rebates and having dependents will receive $260 for each person, with a cumulative cap of $1,300.
A total of 2.1 million residents are set to benefit from these rebates, facilitated by the state’s projected budget surplus of $17.6 billion.
Massachusetts Concludes Major Distribution of Stimulus Checks, Allowing Residents to File 2021 Taxes Until September 15 to Access State Credits Linked to Surplus. In accordance with state regulations, Massachusetts inhabitants are eligible for refunds equivalent to 14% of their 2021 state income taxes, providing an opportunity to claim unutilized credits. This provision is expected to benefit around 3.6 million individuals in total.