The federal government stopped sending out stimulus checks with the end of the monthly payment of the Child Tax Credit payments in December 2021. That coincided with the beginning of record inflation in America which saw prices double for most products and services. But some states stepped in immediately and gave inflation relief to their residents.
Close to two dozen states sent out inflation relief in the form of tax rebates, direct stimulus checks through bank transfers, and paper checks. Some of the 21 states that sent out inflation relief included Alaska, California, Colorado, and New Mexico.
Even Republican states sent out stimulus checks though the party was responsible for scuttling attempts by President Biden to extend the enhanced version of the Child Tax Credit stimulus checks. The CTC stimulus checks proved enormously successful in stifling child poverty across the US. Poverty levels in households with children went down by more than 50% till the payments were halted by the political gridlock in Washington.
The states sending out stimulus checks relied majorly on the American Rescue Plan Act funds sent out to states to back the inflation relief stimulus checks to residents. The money amounted to billions in one form or another from direct payments to tax waivers.
But the support afforded by states was nowhere near the support that the economic impact payments were capable of. And in a scenario when the stimulus checks were blamed for the rise in prices, the support afforded by states was too small to have any direct or immediate impact.
But despite that, the support afforded by states too was the victim of allegations that their payment to residents also fueled inflation to some extent.
The states have typically billed the stimulus checks initially as economic stimulus and more recently, as relief for ever-increasing food and energy costs. But some critics in a knee-jerk reaction have termed such a move inflationary.
But it is not significant for several reasons. One simple reason comes from a better understanding of what leads to inflation and the other is a simple and logical analysis of facts.
Inflation is caused by three basic reasons. The first is an increase in the general price level and not just the price for a single service or good. Inflation can also result from an increase in the money supply without corresponding growth in the economy, also known as monetary inflation.
Inflation can also result from total demand for services and goods that far exceeds the local supply. This is either cost-push or demand-pull inflation. The two terms are self-explanatory. Too much money ends up going after a limited amount of goods. Or it is too few goods to cope with the demand with a corresponding price increase.
Alaska Among States With The Most Generous Stimulus Checks To Tackle Inflation
For more than four decades, the government in Alaska has hare investment income coming in from oil revenues with state residents through the Permanent Fund Dividend Program. For the present year, the payment for each of the approved applicants is way more generous than at other times. Residents each will get a $3,284 stimulus check.
This larger-than-usual amount is caused by an infusion of an extra $662.19 energy relief payment. This energy-relief segment of the Alaska stimulus check is not tabled by the state government.
Residents of Alaska had until the end of March to apply for the state stimulus checks. To be eligible they must also be a resident of the state and not be incarcerated for a full calendar year.
The next payout dates are on April 20 and May 18 this year. The benefits are to be disbursed based on the date an application is received by the authorities or processed.
New Jersey residents are also in line for fresh stimulus checks
The Homestead Benefits is being replaced by the ANCHOR Property Tax Relief program. It was created to offset a year of hikes in property tax, which has reached unmanageable levels. Residents can apply if they own or rent their primary residents in October 2019. They must also file income tax returns or must be exempt from the state income tax of New Jersey.
The annual income requirements have also been stipulated for potential beneficiaries. The Adjusted Gross Income of homeowners must be up to $150,000 or less if they are to receive a stimulus check of $1,500. Those households with a combined AGI of between $150,000 and $250,000 will get a stimulus check of $1,000.
Renters will receive a $450 payment if their AGI is $50,000 or less. Renters are generally excluded from such types of relief programs. The payments that renters get are intended to defray the steep increase in the cost of housing in the US.
The window for the application program closed by the end of February this year. The payments will go out to qualifying residents through May 2023. The payments are expected to be in the form of paper checks mailed directly to homes or even direct bank transfers to the account of beneficiaries. These payments are not subject either to state or federal income tax.
Making The Most Of A Windfall Stimulus Check Form State Governments
Beneficiaries of cash stimulus checks in the form of tax refunds, and also inheritors, work bonus beneficiaries, or from other sources should strategically place such windfall payments.
Financial experts advise families to add such funds to their investment accounts or emergency funds instead of spending them on daily expenses. Beneficiaries can also take up lessons in how to gain profitable and marketable skills. Some can even consider launching a business or a side hustle.
One payment they should first consider is to pay off all high-interest debts including credit card debts. While it is tempting to use newfound wealth to go for some extravagant expenses, it makes sense to use all or at least most of the money to fortify your financial position and invest in the future.
Other states considering fresh stimulus checks in 2023 include Maine, which could give residents $450 to individual filers and double that amount for married couples filing jointly.
Pennsylvania is to give between $250 and $650 to qualifying homeowners, between $500 and $650 to eligible renters, and a maximum of $975 for a section of senior citizens.
