California gas tax rebate payments: 23 million taxpayers will get inflation relief payments from the Newsom Budget deal
Democratic California Gov. Gavin Newsom and legislative leaders have agreed to provide as much as $1,050 to millions of California families to help with inflation and rising gas prices. CBS News recently reported that about 23 million California residents will soon receive “inflation relief” checks of up to $1,050 under a budget deal reached by Governor Gavin Newsom and state lawmakers on Sunday. Millions of California taxpayers will get “inflation relief” tax rebate payments after lawmakers have reached an agreement on the framework of the 2022-23 budget. The deal also suspends the state’s sales tax on diesel.
The $9.5 billion in tax refunds is part of a $12 billion relief plan that is central to a broader $300 billion budget deal that state leaders announced Sunday night.
NEW: Millions of Californians will be receiving up to $1,050 as part of a NEW middle class tax rebate.
That’s more money in your pocket to help you fill your gas tank and put food on the table.
— Gavin Newsom (@GavinNewsom) June 27, 2022
Dealing with Rising Prices
“The checks are part of a $17 billion relief package that will also suspend the state’s sales tax on diesel fuel and provide additional aid to help people with rent and utility bills,” Newsom and Senate President Pro Tempore Toni G. Atkins and Assembly Speaker Anthony Rendon said in a statement. The agreement comes as California drivers face the highest gasoline prices in the U.S., with the average price for a gallon of gas in the state at $6.32 on Monday — or about 29% higher than the national average. The relief checks are designed to help residents cope with “global inflation and rising prices of everything from gas to groceries,” the lawmakers said in the statement.
- But, while California will spend $439 million to suspend a portion of the diesel sales tax, lowering prices by about 23 cents per gallon, the excise gas tax — which is set to increase by nearly 3 cents per gallon on Friday — will remain in place.
- And Californians aren’t likely to start receiving rebates until October, Rendon said last week — incidentally, about a month before the statewide general election.
- Many of the budget deal’s other details are ensconced in a series of “trailer bills” — measures drafted behind closed doors that can include major policy changes with little to no relationship to the budget — published over the weekend.
Here’s how California’s three-tier program will work
The framework includes giving 23 million Californians — a number that provides for tax filers and their dependents — direct payments of up to $1,050. The payments would be issued via direct deposit refunds or debit cards to tax filers by late October, according to the Newsom administration. The state’s Franchise Tax Board estimates that all would be issued by the end of 2022 or early next year for the state’s 17.4 million tax filers who benefit.
Where is the money coming from?
The checks are designed as tax refunds and stem from the state’s record-setting $97 billion budget surplus.
Here’s how the direct payments would work
Taxpayers would receive either $350, $250 or $200 based on their income level with an additional payment of the same amount if they have at least one dependent.
- Single filers who make less than $75,000 would get $350. Joint filers with an income under $150,000 would receive $700. If they have at least one dependent, they will receive an additional $350.
So for example, that means a married couple earning $100,000 per year with one child would get $1,050.
About 82% of the state’s beneficiaries are in this income level.
- Single filers who make $75,001 to $125,000 would get $250. Joint filers with incomes between $150,001 and $250,000 would receive $500. If they have at least one dependent, they will receive an additional $250.
About 12% of beneficiaries are at this level.
- Single filers who make $125,001 to $250,000 would get $200. Joint filers who make between $250,001 and $500,000 would receive $400. If they have at least one dependent, they will receive an additional $200.
About 6% of beneficiaries are at this level.
How about families who earn more than $500,000?
According to the Sacramento Bee, couples who earn above $500,000 and single taxpayers who earn above $250,000 aren’t eligible for the payments.
When will the checks be issued?
Checks will be sent via direct deposit or debit cards by late October, according to local station KCRA.
Inflation accelerated in May, with the consumer price index rising by 8.6%, much higher than economists expected. Inflation has forced US families into paying more for everyday necessities like food and gas.