The federal stimulus checks ended with the third stimulus check in December 2021. Also known as the Economic Impact Payment, these financial support measures supported Americans through the difficult months of the pandemic and continued to sustain them even after the pandemic eased.
The financial payment started immediately after the pandemic spread through America in the first quarter of 2020. It began with a $1,200 stimulus check followed by a supplementary payment of another $600. But the biggest economic support was under the American Rescue Plan Act of March 2021. It was signed by President Biden immediately after he assumed power in January 2021.
The Rescue Plan was more comprehensive in its support measures and was more than the third stimulus check. It also laid down support measures that were wide-ranging and more inclusive. Other than support to individuals and families, it also laid down support measures for businesses, other organizations like educational institutions and hospitals, and state, local, and tribal bodies.
States Rely On Federal Rescue Plan Funds For Inflation Relief Stimulus Checks
The COVID-19 pandemic had an unprecedented negative. impact on state fiscal condition. American states responded to the crisis by increasing spending on public health while shutting down all economic activity. This abruptly brought a halt to all economic activity. This had an adverse impact on state revenues. Comprehending the disastrous economic consequences of such an event, the federal government moved in and sanction multiple economic packages.
The first stimulus package, under the CARES Act enacted in March 2020 included $150B in direct, flexible funds that went to state and other bodies. The states and other bodies were given a deadline to expand the Coronavirus Relief Fund (CRF) by 2021, extended from December 30, 2020.
Exactly a year later the Rescue Plan provided $350 B in emergency funding for state, local, territorial, and tribal governments. The support remedied to a large extent the mismatch between rising costs and falling revenues. While health-related expenses were proving a big drain on state resources through the pandemic, provided $195B for states, with a minimum of $500M for each state.
Another $130B was provided for local governments with a minimum of $1.25B per state provided by the statute that included the amounts allocated to other local bodies within the state. $20B was separately earmarked for tribal governments and $4.5B went to territories.
As part of the state portion of the American Rescue Plan Act of March 2021, the State Fiscal funds were roughly a fifth of the total cost of the bill. These funds were deployed to state and other local bodies in two tranches. While the first tranche went out within 60 days, the second went out a year after the first allotment. This helped mitigate the fiscal impact of the COVID-19 pandemic.
For many counties and cities, the state and local funds under the Rescue Plan were not just a lifeline. The $350B support represented the largest ever fiscal support that these bodies received since the Second World War.
States Continue To Rely On Federal Support For Stimulus Checks
While a few states like California have exclusively relied on their state revenues for the stimulus checks, most states had to fall back on support from the federal administration to see them through 2022, financially the most difficult period for individuals and families.
The state stimulus checks have whittled down in 2023 though some states continue to send out relief stimulus checks to sections of their residents.
Even in march 2023, some states have continued to send out stimulus checks. Taxpayers in south California are eligible for a refund stimulus check worth up to $800. Payments started in the last quarter of 2022 but residents who filed their state income tax after 17 October and before February 115 this year will receive their refund payments by the end of this month.
Maine was among the first to send out an inflation relief stimulus check. In this quarter, it will be sending out a $450 payment to help residents cover heating costs. The payments will go out to around 880,000 residents. The Winter Energy Relief payments started going out in January and are expected to be completed by this month. Governor Janet Mills signed the bill that will go a long way in helping Mainers stay warm this winter.
Idaho Governor Brad Little has authorized the remittance of tax refunds of $300 for individual filers and $600 for married couples filing jointly. But it could be higher at up to 10% of the income tax for 2020 filed by the taxpayer. Around 800,000 refunds are expected to go out by the end of March. A total of $500M is expected to be sent out to residents by that period.
Residents of Massachusetts could get a refund payment that is 14% of the total tax liability to the state. 2021 filers who have filed before October 17, 2022, received their refund by the end of the year. Taxpayers who filed later will receive their stimulus check around a month after filing. They have until September 15 this year to file their returns and claim the Massachusetts stimulus check.
New Mexico is among the few states that give out multiple stimulus checks spread out over 4 months to residents. State residents are still in line for a $500 stimulus check for individual filers and double that amount for married couples filing jointly. Residents have until May 2023 to file their 2021 income tax returns and qualify for refunds.
New Jersey is another state that will be sending out payments in 2023. Around 2M residents of the state are eligible for refunds linked to property tax. This is part of the ANCHOR initiative (Affordable New Jersey Community for Homeowners and Renters).
Homeowners with an AGI of $150,000 or below will receive a property tax refund stimulus check worth $1,500. And homeowners with an AGI between $150,000 and $250,000 will get $1,000. Tenants with an AGI up to $150,000 will receive a stimulus check of $450. The refunds are expected before May 2023.
