By Ryan Buuck, LMU Loyola Law School, J.D./M.B.A. Dual Degree Candidate
Last week, Governor Gavin Newsom announced a new economic recovery package that will include $12 billion of direct payments to residents of the State of California. These payments will be like the three stimulus checks sent by the federal government during the CoVID-19 Pandemic. Under this new California plan, many residents who earn up to $75,000 per year will qualify for a one-time check. California expects two out of every three residents to receive economic relief from the state this year.
Do I qualify?
To qualify, you must be a resident of the State of California, you must have already filed your 2020 taxes, and you must earn between $30,000 and $75,000 per year. If you are married and file your taxes jointly with your spouse, you must make less than $75,000 combined to qualify. If you earn less than $30,000 per year, you will not be able to get this check because you qualified for the Golden State Stimulus check that was announced in February, and you can still claim that payment up until October 15, 2021. The $75,000 threshold is measured by “California Adjusted Gross Income,” which means you could make more than $75,000 per year, but if you make less than $75,000 after deductions, you will still qualify for the check.
Unlike the federal stimulus checks, undocumented immigrants and their families and non-resident and resident aliens who use an Individual Taxpayer Identification Number (ITIN) are eligible for the California stimulus check.
How much will I get?
Each Californian that qualifies for the stimulus check will get $600. If you are married and file jointly, you and your spouse will get $600 total. If you are eligible and you have dependents, you will receive an extra $500. This additional amount will be the same no matter how many dependents you have. For example, if you have one child, you will get an extra $500, and if you have five children, you will also get an additional $500. If you received the Golden State Stimulus earlier this year and you have dependents, you will not be getting the $600 check, but you will qualify for the extra $500 for your dependent.
When will I get it?
Although the e state has announced this payment plan, our legislature still needs to approve it, which may take some time. If the Golden State Stimulus earlier this year is a good indicator, you should expect the state to move quickly on processing these payments. Once a taxpayer is deemed eligible, it takes between two and six weeks to receive the check. Taxpayers who set up direct deposit for their taxes will get theirs faster than those waiting on a check to come in the mail. You can set up a direct deposit at ftb.ca.gov.
How can the state afford this?
In 1979 Californians voted to create a limit on the amount of money the state is legally allowed to spend every year. We pay high taxes in California, and this cap, called the Gann Limit, ensures that our state government is responsible for our tax money. When the state reaches the Gann Limit, the rest of the funds must be returned – half goes to our public schools, and half goes straight back to the taxpayers. The only time this has happened before was 1989, and we got a 15% cut on our taxes. This year, there was a ton of money left over, and it is coming back to many of our bank accounts.