Financial experts and economists see a dangerous storm brewing thanks to a volatile combination of high inflation, rising interest rates and supply-chain issues.
And while the Federal Reserve is doing what it can to control inflation, its moves could be pushing the country closer to a recession.
Inflation dropped slightly from its decades-high rate to a still-scorching 8.5% in July, the S&P 500 has entered bear market territory and the U.S. economy shrunk for the second quarter in a row — usually a clear sign a recession has hit. However, the National Bureau of Economic Research still has to officially determine whether this is a recession or not.
With all this uncertainty, what is clear is that American households are struggling and could use some extra support right now. Some experts are speculating that a coming recession could push the federal government to issue a new round of stimulus checks as they did during the pandemic and in past economic downturns.
And though the federal government hasn’t yet answered the call for more funding yet, several states are stepping in to provide money for residents.
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State rebates
Many states have had historic surpluses over the past year thanks to inflation driving up prices of goods and high pandemic spending. Total state tax collections increased more than 17% in the fourth quarter of 2021 compared to the year before, according to the Tax Policy Center.
“Giving direct aid, direct payments is far more useful than doing income tax cuts, or gas tax holidays,” says Lucy Dadayan, senior research associate at the Urban- Brookings Tax Policy Center.
Here’s a list of what states are offering. Make sure you don’t miss yours.
California
At the end of June, Gov. Gavin Newsom took to Twitter to announce rebates.
Millions of Californians are getting a rebate check of up to $1,050 to help offset the high cost of gas and other goods, known as the middle class tax rebate.
Single people making under $75,000 will get $350 and married couples making under $150,000 will get $700, if a couple has a dependent, that means they get an extra $350, which would total $1050.
Colorado
Coloradans will get $750 cash back this summer to help with the rising costs of gas, groceries and other items.
It will be delivered in the mail in August or September to anyone who filed their tax returns by the end of May 2022. About 3 million people should get the check.
Delaware
A relief rebate program was signed in Delaware in April. It’s a one-time payment of $300 per adult to help with the high cost of groceries and gas.
Checks should have been delivered by the end of May to people who filed their 2020 and 2021 taxes. The government says it’s working to make the payment available to those who didn’t file their taxes by the end of October.
You can check the status of your rebate here).
Florida
Families in Florida are getting a [one-time payment of $450 per child] (https://www.flgov.com/2022/07/15/first-lady-casey-desantis-makes-major-announcements-to-support-the-hope-florida-a-pathway-to-prosperity-initiative/) for those eligible.
That includes foster parents, caregivers and families that are receiving money from the Florida Temporary Assistance for Needy Families program.
Florida First Lady Casey DeSantis made the announcement in July. Nearly 60,000 families are expected to get the funds.
Georgia
People in Georgia are eligible for a rebate on their 2020 and 2021 taxes, thanks for a revenue surplus. Bill 1302 was signed into law in March.
Married couples can get up to $500 back, if you file jointly. Single filers can get up to $250 while people who file as head of household can get a maxim of $375.
Hawaii
The state government in Hawaii passed a bill giving tax filers a rebate of $300 if they make below $100,000 and $100 for filers who earn above that threshold. The department of taxation says it’s still working on how to roll out the measure and hasn’t released any specifics yet.
Idaho
People in Idaho should expect an email notifying them of their rebate. Full time residents who filed taxes in 2020-2021 are eligible.
The government is using two ways to calculate the amount, $75 or 12% of your 2020 Idaho state taxes, whichever is greater.
The tax commission says it will issue about 25,000 payments weekly, which can be expected through direct deposit of the mail. You can check the status of your rebate here.
Illinois
In Illinois, direct rebate checks will be given to working families. Relief checks of $50 for individuals and $100 per dependent up to three children per family will be sent out at a cost of $685 million.
Indiana
The government in Indiana expects to give more than 4 million $125 checks to residents thanks to a large state revenue, which grew 14%.
The Department of Revenue says money would start arriving in bank accounts in May and continue until mid-summer. You’re eligible if you filed a resident tax return for 2020 and 2021.
Kentucky
Tax filers in Kentucky will get rebates of up to $500 for single filers and $1,000 for joint filers.
Additionally, Gov. Andy Beshear proposed a one-year reduction in the sales tax rate from 6% to 5%.
Maine
Residents in Maine are getting one of the highest relief payments in the country. Gov. Janet Mills signed the supplemental budget into law in April. It will see people get a one-time payment of $850 for inflation relief.
The money comes from the state’s surplus of $729.3 million.
To be eligible for the payment, residents must file a tax return by the end of October 2022.
Single filers will have to have had a federal adjusted gross income of less than $100,000, $150,000 if filing as head of household or $200,000 for couples filing jointly.
Massachusetts
The Massachusetts Senate approved $250 stimulus checks for taxpayers.
Single filers who earn between $38,000 and $100,000 can expect a one-time payment of $250, while married couples who file jointly will receive $500. Payments are expected to begin in the fall.
Minnesota
The state of Minnesota passed legislation giving a one-time payment of $750 to front-line workers.
Applications closed July 22 but Gov. Tim Walz is still pushing legislators to pass a bill to send rebate checks of $1,000 to Minnesotans to cover as the rising price of gas and food.
The proposed plan would see people who earn less than $165,000 get $1,000 and couples earning less than $275,00 would get $2,000.
New Jersey
Residents in New Jersey with at least one dependent child and a tax balance of $1 or more will get a rebate of up to $500, known as the Middle Class Rebate. Payments will be issued as a check separate from your tax return.
The Division of Taxation in New Jersey will begin mailing checks on July 2.
New Mexico
The state of New Mexico is bringing out financial relief in the form of $750 stimulus to help with the rising cost of groceries and gas. Two laws were passed in the state providing a rebate and relief payment.
Depending on income, an eligible person will get two to three payments of $250. For families the payments will be $500.
Taxpayers should have received one of those payments either by direct deposit or check already. Another payment will be made later this summer. You can check the status of your return here.
Oregon
The Oregon Department of Revenue has issued one-time payments of $600 to eligible households, meaning a single person, couple or family that live together.
Eligible households qualified for the Oregon Earned Income Tax Credit (EITC) on their 2020 tax filing and lived in Oregon for the second half of 2020.
Rhode Island
Residents of Rhode Island are getting a one-time stimulus check expected to arrive this fall.
The stimulus is coming in the form of a child tax credit. Eligible households will get $250 per child for a maximum of three children.
South Carolina
Towards the end of the year taxpayers in South Carolina will be getting refund checks of up to $800.
If you live in South Carolina, how much you’ll get depends on your tax liability. But to qualify for these checks, you’ll have to have filed your taxes for 2021.
Virginia
Gov. Glen Youngkinn signed the budget in June that will see income tax refunds of up to $250 for individuals and $500 for married couples and eliminates the 1.5% state grocery tax.
Concerns have been raised that stimulus payments have contributed to inflation but Dadayan says that relief money wouldn’t have had as great an effect as supply chain issues, the war in Ukraine and gas prices.
Ivory Johnson, a certified financial planner and founder of Delancey Wealth Management, says stimulus spending goes further than helping the taxpayer, it can be a preventative measure for states.
“The states are doing that because they know either, ‘I send them money, or they file for unemployment, or they file for disability or they file for Medicaid.’ These are things that the state has to pay for,” Johnson says.
Pending stimulus spending
Several other states are considering tax breaks and have legislation pending, including:
New Hampshire
Legislators in New Hampshire have proposed a one-time rebate of $25 to vehicle owners registered in the state between July 2021 and June 2022 to help with fuel costs.
Kansas
Governor Laura Kelly made a budget amendment in April announcing a one-time $250 tax rebate to all Kansans who filed a 2020 tax return in 2021. It will cost the state a total of $460 million but it wasn’t finalized before the legislative session ended.
North Carolina
State senators proposed a one-time $200 payment to all licensed drivers in the state. The Gas Tax Rebate would be funded out of the state’s $1.3 million revenue surplus.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source: https://finance.yahoo.com/news/potential-recession-hanging-over-country-100000209.html