With the cost of living in California continuing to rise, the state is providing citizens with one-time inflation relief checks this year.
These tax breaks were agreed upon by Governor Gavin Newsom and state legislators in Sacramento as part of the state budget.
To help Californians, Newsom proposed a moratorium on the state’s gas tax and a $400 debit card for each vehicle with no upper-income limit.
As a result of their opposition, state legislators created the Middle-Class Tax Refund, which could result in qualified families receiving a one-time payment of up to $1,050, depending on their income, tax filing status, and the size of their home.
A one-year suspension of the state’s 23-cent diesel sales tax is also included in the agreement.
This page contains all of the information you need to know about California’s inflation relief checks, including who qualifies, how much they’ll receive, and when they can expect to receive them.
For more information on anti-inflationary measures, see which states are offering tax breaks and suspending the state gas tax.
Who is eligible for the California tax rebate check? The refund plan is divided into three tiers based on your adjusted gross income on your 2020 California state tax return.
Couples with a combined income of less than $150,000 and single taxpayers earning less than $75,000 will each receive $350, plus an additional flat fee of $350 if they have dependents.
As a result, a married couple with children could receive up to $1,050 in benefits. According to KCRA, approximately 82% of beneficiaries fall into this major category.
Individuals and couples earning between $75,000 and $125,000 will each receive $250, plus an additional $250 if they have dependents, for a total of $500. A family with any number of children could be given $750.
Individuals and couples receiving between $125,000 and $250,000 and $250,000 to $500,000 would each receive $200. This category has a $600 cap per child.
The Middle-Class Tax Refund is expected to benefit 23 million Californians in 2020, even though single taxpayers earning more than $250,000 and married couples earning more than $500,000 would be excluded from receiving any funds.
You can get an estimate of your tax bill from the Franchise Tax Board’s website.
What are the eligibility requirements for the tax credit?
Aside from meeting income requirements, residents must file their 2020 tax refund by Oct. 15, 2021, have lived in California for at least half of the 2020 tax year, and be California residents on the date the payment is issued.
Furthermore, because they were already adults, they were not eligible to be claimed as dependents for the 2020 tax year.
When will the payments from California begin?
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The Franchise Tax Board anticipates that payments will be distributed beginning in October and ending in the middle of January 2023. The project will be funded with funds from California’s $97 billion budget surplus.
What method will California use to transfer the funds?
If you selected direct deposit of your refund when submitting your 2020 California state tax return electronically, you will receive your tax rebate in the same manner.
Otherwise, a debit card should be used to pay you.
