GENERAL

Are the 4th Stimulus Checks Really Coming in the US?

When the U.S. began to shut down in the wake of the onset of Covid-19, Millions of Americans had lost their jobs and were without income to maintain their daily needs.

Then, Congress passed a massive emergency aid package aimed at providing relief to help with COVID-19. In that legislation “economic impact payment” –commonly referred to as “stimulus checks” or “recovery rebates” is a key provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act legislation that Congress passed to help reduce the financial burden of COVID-19 on individuals and their families.

There have been a total of three rounds of such checks referred to as “stimulus checks” by many Americans. 

The first check authorized by The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided up to $1,200 per adult and $500 per eligible dependent child.

In 2020, the second stimulus check put up to $600 to each eligible adult and dependent child. The third round check authorized by the American Rescue Plan Act in 2021 provided up to $1,400 per adult and dependent.

Although the government had authorized stimulus checks during the financial crisis before, the size and scope of these third rounds of stimulus checks are unprecedented.

However, a sudden influx of more than $1 trillion dollars into the market through direct stimulus payments had sent prices up quickly. And soon, inflation was rising at its fastest rate. There’s no question that the stimulus checks are one of the reasons to cause inflation and shall be responsible for at least some of it.

Now, the US inflation hits a 40-year high of 8.6%, which is pushing up prices of almost all items from housing, gasoline, airline tickets, food, new and used cars, as well as medical care and clothing. May’s 8.6 percent year-on-year growth figure dashed hopes that April had begun to see a looming slowdown in inflation. 

The war in Ukraine has exacerbated this phenomenon, pushing up petrol and food prices.  As a result, energy inflation rose 34.6% in May from a year earlier, reaching the highest rate since September 2005.  Food inflation was 10.1%, reaching the highest rate since March 1981. 

According to the data from U.S. Energy Information Administration, gasoline prices have been breaking new records every day, averaging $5.032 per gallon (4.55 liters) in June, up 59 percent from $3.157 per gallon a year ago.

However, unlike the fast reaction and relief policy to help Americans during the outbreak of covid-19, there is little immediate relief to control the soaring inflation. Although President Biden is calling on Congress to suspend the gas tax for three months–until the end of September–to reduce the burden of consumers facing the high oil price, the gas tax holiday policy is still not approved. Hence, some states are taking action in their own power. They have sent or planned to send some payments to eligible Americans this year through some tax rebate policies including State Tax Rebate, Child Tax Credit Payment, and Gas Rebate Checks. Those tax rebates checks and credit payments are regarded as the fourth round of stimulus checks at the state and city levels.

Under the tax rebate plan, households making as much as $75,000 for individuals or $150,000 for joint filers would receive $350 per taxpayer, plus an additional $350 if they have at least one dependent. So, a single parent would receive $700 and two-parent families would receive $1,050. This is the standard tax rebate plan in California, and there are other 12 states also agreed to send out tax rebate payments. However, different states set different rules.

Now, 13 states also passed Child Tax Credit Payment. As for California, families who earn less than $25,000 are eligible to receive $1,000. And those earning between $25,000 and $30,000 would receive a reduced credit. This is only available for families with a child under age 6.

California, North Carolina, and Chicago are considering gas rebates. In California, the governor agreed to suspend the state sales tax on diesel fuel. Residents will also receive “inflation relief” checks of up to $1,050 per family. North Carolina senators proposed giving all licensed adult drivers a one-time payment of $200 toward fueling up, which is in the discussion. Chicago, the wind city, has already started issuing some of the 50,000 prepaid $150 gas cards and 100,000 prepaid $50 transit cards approved by the city council. Residents can get more detailed tax rebate information for each state from here.

Unlike previous pandemic relief measures, these payments are much more targeted and with considerably lower dollar amounts. These stimulus checks are expected to help Americans reduce their costs without making inflation worse.

If you are living in a state that is offering stimulus checks for eligible adults or independents, don’t hesitate to claim the rebate or payment. Remember to check the terms or conditions for applying for these rebate checks and fill the taxes or provide other required documents to get those checks. If you are not eligible or your state is not considering or enacting stimulus checks right now, here are some tips to help you live relatively comfortably during the inflationary period.

First, stick to your budget to fight inflation. You shall rethink your travel plan this summer. Travel less or travel in public areas and rely on public transportation to reduce costs of tickets or gas oil. Second, reshape your shopping habits. Limit unnecessary spending and uncover the best possible prices for the goods. Third, if you are talented or skilled, try to find a part-time job to get some extra income.

TIME BUSINESS NEWS                                           

TBN Editor

Time Business News Editor Team