Californians should expect a boost to their bank balance in the coming weeks, thanks to the state’s Middle-Class Tax Refund. These inflation relief checks will give Californians some extra cash — right in time after another mixed-bag inflation report.
As part of an agreement between state legislators and Governor Gavin Newsome, state residents who filed taxes in 2020 will receive up to $1,050, either by direct deposit or a state-issued debit card. The funds are intended to help offset inflation and rising gas prices — which are higher in California, at $5.42/gallon, than anywhere else in the country.
Who qualifies for the California Inflation Relief refund?
State taxpayers who filed their 2020 taxes before October 25, 2021, and who earn less than $500,000 that year, are eligible. However, the refund amounts are tiered to both income level and dependents.
Oddly enough, those whose sole income is Social Security or who otherwise do not earn enough to warrant filing an income tax return are not eligible for the relief payment.
Funds will be automatically deposited to those who qualify, so there is no need to apply.
How much will the California Inflation Relief refund be?
Refunds are allocated by tier.
Tier one: Single taxpayers who earn less than $75,000 will receive $300, and married taxpayers who earn less than $150,000 will receive $700. If you have at least one dependent, you will receive an additional $350.
Tier two: Single taxpayers who earn between $75,001 and $125,000 will receive a refund of $250, while married couples who earn between $150,001 and $250,000 will receive $500. Single and married filers with at least one dependent will receive an additional $250.
Tier three: Single taxpayers who earn between $125,001 and $250,000 will receive $200, and married filers who earn between $250,001 and $500,000 will receive $400. Both married and single filers with at least one dependent will receive an additional $200.
Income thresholds are determined by 2020 tax information. The California Franchise Tax Board developed a tool to help residents estimate their total refund amount.
When will the California Inflation Relief Refunds hit bank accounts?
The details have been murky on when exactly Californians can expect their refund, but the California Franchise Tax Board (FTB) announced earlier this week that deposits are coming in a matter of weeks.
According to the FTB, residents who e-filed their income tax returns and had tax refunds direct deposited in the past should expect a deposit between October 7 and October 25. Those who did not e-file or receive a direct deposit should expect a state-issued debit card between October 25 and December 10.