State Inflation Relief Stimulus Checks In 2023: Coastal States Take The Lead

Stimulus Check
Stimulus Check

The three rounds of federal stimulus checks began immediately after the first pandemic lockdown was declared in February 2020. The multiple economy support measures ensured that Americans could afford food on their table, pay their rent and credit installments, and still afford to save a part of the payments.

But the whole edifice of the federal stimulus checks was dismantled in 2022 when the last of the expanded Child Tax Credit stimulus checks were paid in December 2021. Even as inflation gripped America, the federal government found itself unable to convince the Republicans and even a section of Democrat Congressmen to push through another round of economic impact payments.

Despite clamor from various quarters, including a large section of Democrat legislators, President Biden was unable to push through a fourth stimulus check. Even the expanded Child Tax Credit stimulus check, which the President had personally pushed for extending, fell through.

Losing The Expanded Child Tax Credit Stimulus Check Hit Households Hard

Studies on child poverty revealed that the rate of poverty in households with children increased dramatically in the space of just one month, with 17% of children reportedly under the poverty line in January 2022 compared with 12% in December 2021.

This drastic change in the space of a month has been attributed solely to the discontinuance of the expanded Child Tax Credit stimulus check in December 2021. The CTC payments were signed into law in March 2021 under the American Rescue Plan Act. But Congress refused to allow it through for an expanded version of the payments.

While President Biden had the necessary majority in the House of Representatives at that stage, the Senate was evenly poised at 50 seats each for the two parties. With Vice President Kamala Harris’s vote being the cincher, President Biden’s plans would have sailed through. But two recalcitrant Democrat Senators, Joe Manchin, and Krysten Sinema went against the generosity and the bill collapsed.

In the absence of the monthly stimulus checks that were guaranteed as an advance by the expanded CTC payments, around 3.7 million more American children slipped into poverty once again.

The Child Tax Credit was not new and existed in several different versions since it was first signed into law back in 1997. President Biden expanded it in what was the biggest in history. The payments were now bigger, and for the first time going out as monthly payments instead of a tax rebate payable only during the tax season.

For 2021 expanded Child Tax Credit payments, the checks came well in advance in 2021 itself between July and December. The payments were also much more than the annual $2,000 under the previous law.

The revision of the law led to the CTC payments being expanded to between $3,000 and $3,600 a year depending on the age of the child. While the lower amount was for children between 6 years and 17 years, the bigger version of the payments went out to parents who had children under the age of six.

What was more crucial in the present version of the child tax credit stimulus check was that President Biden made the benefits readily available for families with little or no income, and who were previously not eligible for the credit payments.

By the end of December 2021, over 3.7 M children had moved out of the clutches of poverty. And in January, these same number of children were back in the clutches of poverty. It lends credence to the fact that there is an immediate and direct connection between child poverty and the expanded Child Tax Credit stimulus checks.

In 2022 and even by the last quarter of 2021, as inflation figures jumped alarmingly month-to-month, the last of the federal stimulus checks stopped for good.

But even as inflation continued to assail low and moderate-income citizens, many states stepped in quickly and used funds from the Rescue Plan to send out stimulus checks to residents. It was in the form of direct bank credits, debit cards, tax rebates, and paper checks. Other measures taken by various states included sales tax waivers for particular products for a specific period.

Midwest Region Residents Largely Miss Out On Stimulus Checks

But the Midwest region mostly missed out on the stimulus check as most payouts were confined to the coastal states, both on the west and the east. The few states that did make some form of payouts concluded their payments early. But two states in the Midwest region continue to send out inflation relief payments to their residents.

Illinois is one such state where residents could get two rounds of payments this year. The first of the stimulus checks is a rebate on income tax that is worth $50 for individual state filers and double that amount for joint filers.

To qualify, a person has to be a resident of the state who has paid their 2021 property tax on the primary residents that they owned in 2020. To get this rebate, the adjusted gross income of the residents must be less than $250,000 for individual filers and double that amount for joint filers.

The rebate stimulus checks began in September 2022. Thus, for many residents of Illinois, the amount has already been credited. But these payments are scheduled to continue into this year for residents who have not been paid at this stage.

While the rebates coincided with the last quarter and the festive season, for many residents of Illinois, the payments have continued into 2023.

Indiana also began sending out refunds for residents that added up to $125 for state single filers and double that amount for joint filers. The state has not linked income to the payments. But residents who benefitted from the stimulus checks were required to file both their income tax returns for the state for 2020 and 2021.

The second round of rebates came in the form of a $200 payment that began going out last year. Taxpayers qualifying for the $125 stimulus checks were automatically qualified for the second payment worth $200.

But for state residents that qualified for the only $200 payment, payments are being withheld. The money will only go out to the residents who file the income tax returns for the state for 2022.