As the echoes of the federal COVID-19 stimulus checks fade, several U.S. states are stepping up to the plate, rolling out tax rebates that resemble those checks. These rebates aim to provide a buffer against inflation, pouring money back into the pockets of many residents.
Tax rebates are quite important for Americans, and the Internal Revenue Service (IRS) acknowledges this. These unexpected-but-welcome paper checks help individuals and businesses keep more of their income, while also serving as a tool for the government to encourage certain behaviors and stimulate economic growth.
State Tax Rebates: A Snapshot
While they might not have the heft of the federal stimulus checks, these state payments, often dispatched as tax rebates, have become a welcome lifeline for households in a financial pinch. The figure? Typically a few hundred dollars, but it can soar beyond thousands for some families or companies.
State stimulus checks were the talk of the town in 2022, even rustling up a storm with the Internal Revenue Service (IRS). Fast-forward to 2023, fewer states are in the rebate game. Those still in the mix underscore the persisting financial strain of the pandemic and rampant inflation. With inflation stubbornly surpassing the comfortable 2% benchmark, governors are bringing attention to their states’ financial good fortune and their decision to return surplus funds to residents.
While most states have closed the rebate chapter:
Individual tax rebates typically occur when a person overpays their income taxes throughout the year. This can happen if too much money is withheld from their paychecks or if they have tax credits that lower their tax liability. In such cases, the government refunds the excess amount, providing taxpayers with a lump sum of money. This refund can be used for various purposes, such as paying bills, saving, or making purchases.
Businesses can also receive tax rebates through various incentives and credits provided by the government. These incentives are often aimed at promoting specific economic activities, such as investing in renewable energy, hiring disadvantaged workers, or conducting research and development.
Alabama: Cash Back and Tax Cuts
- Alabama gears up to distribute $150 rebates to its residents come November.
- In light of the Education Trust Fund amassing a $2.8 billion surplus, Alabama is trimming its grocery tax from 4% to 3% next month.
- These rebates aim to cover residents for the heftier grocery taxes they bore during this surplus accumulation.
- The beneficiaries? Almost 2 million taxpayers from 2021.
Montana: Overpay? Get It Back!
- Montana residents who filed 2021 taxes could pocket rebates up to $1,250.
- With the distribution starting last month, it’s projected to wrap up by Aug. 31.
- Governor Greg Gianforte clarifies, “Montanans overpaid their taxes, and we’re giving it back.”
- Homeowners stand a chance to snag property tax rebates up to $675. But, act fast! Claims open till Oct. 1.
New Mexico: Fighting Inflation One Check at a Time
- New Mexico went generous in June, dispatching $500 rebate checks.
- Aimed to combat inflation, 900,000 taxpayers have felt the joy, thanks to state revenue records.
Minnesota: Pandemic Relief through Rebates
- Minnesotans earning under $75,000 in 2021 have started receiving $260 rebates.
- A nod to pandemic-induced financial woes, families with dependents can amass up to $1,300.
- A $17.6 billion projected state budget surplus empowers these rebates, benefiting 2.1 million residents.
Massachusetts: Last Call for Stimulus Credits
- The rebate train is nearly at its last stop in Massachusetts.
- Residents have a deadline: File 2021 taxes by Sept. 15 to claim credits from a state surplus.
- Legally, residents can demand 14% refunds on their 2021 state income taxes, potentially delighting 3.6 million people.