During the height of the pandemic, the federal government sent stimulus payments to millions of Americans. Many states have a budget surplus this year, and they are spending some of it to assist taxpayers in coping with the high inflation rate.
Depending on who is doing the counting, up to 20 states are providing one-time rebates or increased tax credits. According to Richard Auxier, a senior policy associate with the Tax Policy Center, that’s an increase from just a few last year.
While some governments have already sent out the payouts, others won’t stop until well into the following year. If you don’t often file an income tax return, you might want to check with your state tax agency to see if you might still be eligible, Mr. Auxier advised.
Inflation: What Is It?
Your dollar will not stretch as far tomorrow as it did today due to inflation, which is the gradual loss of purchasing power. It is frequently described as the yearly shift in prices for commonplace items and services including toys, food, furniture, clothing, and transportation reports NY Times.
Why Does Inflation Occur?
It can be the outcome of increased customer demand. However, occurrences that have little to do with economic fundamentals can cause inflation to rise and fall.
Is Inflation Harmful?
Depending on the situation. Fast price increases are problematic, while slow price increases can result in rising wages and job creation.
Because they spend a larger portion of their income on basics like food, shelter, and gas, poor households may find it particularly difficult to cope with inflation.
Can The Stock Market Be Impacted By Inflation?
Depending on the taxpayer’s income (up to $250,000 for singles and $500,000 for married couples in 2020), certain states base payments, including California. By October 15, 2021, they must have submitted a state tax return.
Payments under the state’s “middle-class tax refund” credit, which ranges in value from $200 to $1,050, started in October and will last through January.
Others, like South Carolina, restrict reimbursements to those who owe taxes for 2021, so those who ended up owing no taxes last year won’t be eligible for one. The rebates have a maximum value of $800.
Some states are required to send refunds. According to a state audit, the cap was exceeded, in violation of a Massachusetts law requiring that excess tax income be refunded to taxpayers.
For 2021, taxpayers will receive refunds that are about equal to 14% of their tax amount. According to the state’s website, taxpayers who have already filed their 2021 tax returns ought to receive their refunds by mid-December. If you haven’t already, you still have time to file and receive a refund by September 15, 2023.
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