More State Stimulus Assistance Projected for Lower-Income Americans in 2023

As several states announce new rounds of stimulus checks, it seems residents in these areas can look forward to increased financial support to help them navigate through 2023. This recent batch of stimulus checks seems to be particularly targeted, with a focus on providing relief primarily to households of low and moderate income.

Reflecting on the previous year, two major developments stand out. The first was the cessation of nearly all federal stimulus checks, most notably the economic impact payments and the augmented version of the Child Tax Credit stimulus check. The second significant shift was the noticeable rise in prices impacting nearly every product and service. From fuel to food, there was a considerable upward surge in prices, with increases reaching up to 50% in some instances. Fuel prices saw the steepest increase, which consequently impacted the pricing of all other products.

In response to this challenging situation, states were swift to enact various forms of inflation relief, including stimulus checks, tax rebates, direct bank transfers, one-time payments, and specific product sales tax exemptions.

States that initiated their payments in the final quarter of 2022 continued distributing outstanding stimulus checks well into the new year. Additionally, some states have decided to provide fresh payments that were announced in 2023. These payments are expected to carry on until the second quarter, and some might even extend throughout the entirety of 2023.

Despite a modest easing of inflation rates starting in the last quarter of 2022, they remain substantially higher than pre-pandemic levels. This continuous rise in costs has particularly affected low and moderate-income families, especially those who did not benefit from the series of stimulus checks distributed by federal and state governments.

Approximately seven states are sending out stimulus checks that will extend into the second quarter, separate from the spillover from the last quarter of 2022. These payments are the latest announcements or fresh payments of stimulus checks that were previously approved.

For example, in South Carolina, lawmakers approved a tax refund of up to $800 when they passed the state budget last summer. This rebate stimulus check was sent to numerous residents in 2022. Notably, these state stimulus checks will not be subject to federal income taxes, and the same applies in South Carolina. Because of Hurricane Ian’s impact, the South Carolina stimulus check will be distributed in two phases, depending on when beneficiaries filed their 2021 income tax returns with the state.

In Idaho, the state administration approved 2022 Special Session rebates expected to be paid out in the first half of the year. The rebate amount exceeds $300 for individual filers, doubles for joint filers, or amounts to ten percent of the taxpayer’s 2020 income tax liability. The Idaho state tax commission anticipates around 800,000 payments, totaling roughly $500 million.

New Jersey is distributing $2 billion as a property tax rebate, expected to benefit about 2 million residents. The rebate amount is income-dependent, with homeowners earning an Adjusted Gross Income of up to $150,000 qualifying for a $1,000 stimulus check, and those earning between $150,000 to $250,000 also receiving a stimulus check of $1,000.

Moreover, renters are set to receive stimulus checks from the New Jersey government. They will receive $450 as long as their state Adjusted Gross Income is $150,000 or less. Payments are expected to be sent out in the second quarter of 2023, no later than May 2023.

Residents of Maine will receive a $450 payment to help them cover heating costs during the state’s harsh winter. Around 880,000 residents of the state, the same number of people who received the first state stimulus checks approximately a year ago, are set to receive these checks.

Massachusetts taxpayers will receive a refund that equates to around 14% of their state tax liability. Taxpayers who filed their 2021 income tax returns before October 17, 2022, received their refunds before December of last year. Those who will file later, up to September 15 this year, will receive their stimulus checks a month after they file.

In New Mexico, residents have already received two rounds of stimulus checks. This third round may still give taxpayers a stimulus check of $500 for single filers and $1,000 for joint filers. Residents can file their 2021 income tax returns by May 2023 and qualify for a refund.

Finally, in Sonoma County, California, a new relief check of $500 is set to kick off. This pilot program, implemented under the Pathway to Income Equity, aims to assist 305 pregnant and parenting families in alleviating severe financial distress. The First Five Sonoma County leads the operation and collaborates with the county’s community organizations. Funding is sourced locally from the County administration, the City of Healdsburg, Petaluma, Santa Rosa, and the Rescue Plan Act of 2021. The goal of this two-year pilot program is to ensure children in the county can afford their education and grow in a stable environment.