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Though California gas prices hover above $5.80 per gallon—the highest in the nation—financial relief is on the way for some state residents.
Gov. Gavin Newsom has signed California’s budget for 2022-2023, including direct payments of $350 to $1,050 for 23 million Californians—more than half of the state’s residents.
“California’s budget addresses the state’s most pressing needs, and prioritizes getting dollars back into the pockets of millions of Californians who are grappling with global inflation and rising prices of everything from gas to groceries,” said a joint statement from the governor and state assembly leaders announcing the budget framework agreement on June 26.
The state has launched an information page for what’s now called the “Middle-Class Tax Refund,” which includes a calculator for estimating your payment amount.
When and How Will Payments Be Issued?
Stimulus payments will be issued by California’s Franchise Tax Board via direct deposits and debit cards. Payments will be disbursed starting in October and will continue through early 2023.
What’s in the Inflation Relief Package?
The $17 billion inflation-relief package within the larger state budget includes stimulus payments, a temporary suspension of state diesel taxes and help with rent and utility costs.
Twenty-three million residents are expected to qualify for the Middle-Class Tax Refund.
To qualify, you must have filed your 2020 state tax return by October 15, 2021, and been a California resident for at least six months in 2020. You must not have been a dependent on someone else’s return for the 2020 tax year, and you must be a California resident on the date your payment is issued.
The payments will be offered on a sliding scale, based on income and tax-filing status. Low-income tax filers with at least one dependent stand to receive the highest payouts.
Like the two previous Golden State Stimulus payments, individuals who earn more than $75,000 will not receive the full benefit, but other details have changed.
Here’s a breakdown of eligibility for the maximum payout:
- $350: Individuals who earn less than $75,000 per year
- $700: Couples who file jointly and earn less than $150,000 per year
- $350: Additional payout for the above families who have at least one dependent
Income limits to qualify for the minimum payout:
- $200: Individuals who earn up to $250,000 per year
- $400: Couples who file jointly and earn less than $500,000 per year
- $200: Additional payout for the above families who have at least one dependent
You can view the income breakdown and calculate your eligibility via the California Franchise Tax Board.
Diesel Tax Holiday
Several upcoming legislative measures may temporarily shift the price of gas before the end of the year, including a proposed federal gas tax holiday.
California’s budget package doesn’t include a suspension of the state’s gas tax, which is the highest in the U.S. at 68 cents per gallon. The budget will, however, include a suspension of the state sales tax on diesel fuel for 12 months, starting on Oct. 1.
Other Benefits for California Residents
The budget contains a handful of additional measures to try to relieve inflation’s impact on residents:
- $1.95 billion for emergency rental assistance for qualified low-income tenants who requested assistance before March 31
- $1.4 billion in funds to help residents cover past-due utility bills
The budget also includes a $14.8 billion, infrastructure and transportation package, as well as more than $200 million in additional funding that will go toward reproductive health care services.
California’s new budget also provides universal access to health coverage for low-income residents aged 26 to 49, regardless of immigration status, becoming the first state to do so.