At least 20 states already offer one-time tax rebates and tax credits to help residents manage the rising cost of living in the face of extraordinarily high inflation and rising interest rates.
The United States is seeing its highest level of inflation in forty years. Rates decreased to 7.6% in October from 9.1% in June. The US Labor Department estimates that the annual core inflation rate is 6.3%.
According to Moody’s Analytics, consumer budgets are still being squeezed, and inflation expectations have increased significantly in November.
States Tax Rebates
States are proposing tax reductions and rebates as a means of assistance. Here is a breakdown of what each state provides:
In California, over 50% of people eligible for the Middle-Class Tax Refund have already received their funds. Depending on an individual’s income, file status, and dependents, the state makes inflation relief payments ranging in value from $200 to $1,050. So far, the average payment has been around $544.
Taxpayers in Colorado are eligible for rebates ranging from $750 for single filers to $1,500 for joint filers.
Each adult resident might receive a one-time payment of $300 under the 2022 Delaware Relief Rebate Program, while couples could get $600. Delaware residents recovering from the COVID-19 pandemic and experiencing higher grocery and petrol expenses are supposed to benefit from the relief.
Due to the state’s revenue excess, Georgia’s Department of Revenue announced a refund of income taxes beginning in 2020. For single taxpayers and married individuals filing separately, the maximum refund is $250.
Filers who are the head of household are eligible for a $375 maximum refund. For married couples filing joint returns, the maximum refund is $500.
Hawaii passed legislation that offers a rebate for residents filing their 2021 individual tax returns on or before December 31, 2022. Depending on the taxpayer’s federal adjusted gross income and filing status, the refund amounts for each exemption range from $100 to $300.
Every taxpayer in Idaho will get $75, which equals 12% of their state income tax debt.
The $1.83 billion assistance package approved by Illinois includes several tax rebates. Tax refunds are available in the amounts of $50 per person and $100 per kid (up to a limit of three children) for a total refund of $400. The state stipulates that credits may be claimed for up to three years following the initial tax filing date.
Residents of Indiana who submitted a tax return for the 2020 tax year with a postmark date of January 3, 2022, or earlier should be entitled to a refund automatically. In addition to a $200 payment later in the year, the refund includes a $125 payment made in May to all taxpayers, regardless of income.
Anyone earning less than $100,000, or less than $200,000 for a married couple filing jointly, is eligible for Maine’s rebate, which provides a one-time payment of $850, or $1,700 for couples.
Massachusetts residents who are eligible will get a credit equal to about 14% of their unpaid personal income taxes in the form of a refund. For instance, a person who made $50,000 last year and reimbursed the state for $2,500 could be eligible to receive around $350 back.
Tax breaks in New Jersey are based on whether a person owns or rents a home. Homeowners making up to $150,000 will get a $1,500 tax credit, while those between $150,000 and $250,000 will get a $1,000 rebate. Renters will receive $450 cheques if their income exceeds $150,000.
All taxpayers in New Mexico received rebates of $500 for single filers and $1,000 for joint filers, heads of households, and surviving spouses.
Property tax reimbursements of up to $1,050 began to be given to nearly 3 million New York state residents in June. The average refund to New York City households was $425. Additionally, residents making less than $75,000 annually are anticipated to get an average of $1,050.