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Stimulus check: Californians will get up to $1,050 in "inflation relief" checks

What’s driving inflation?
What’s driving inflation, high gas prices? 07:25

About 23 million California residents will receive "inflation relief" checks of up to $1,050 after Governor Gavin Newsom on Thursday signed a $308 billion state budget that includes the payments.

The checks are part of a $17 billion relief package that will also suspend the state's sales tax on diesel fuel and provide additional aid to help people with rent and utility bills, Newsom said in a statement. The inflation-relief checks are tax refunds that will send a total of $9.5 billion back to state residents.

The agreement comes as California drivers face the highest gasoline prices in the U.S., with the average price for a gallon of gas in the state at $6.27 on Friday — or about 29% higher than the national average. Earlier this year, Newsom had proposed sending stimulus checks of $400 per vehicle to state residents, with a cap of two vehicles. But other lawmakers had pushed for a plan that would provide bigger checks to people who earn less.

"In the face of new challenges and uncertainties, we're providing over $17 billion in relief to help families make ends meet," Newsom said in the Thursday statement.

California residents can see how much they qualify for by using this "middle-class tax refund calculator."

While the payments will undoubtedly take the edge off higher costs at the pump, they also raise questions about the impact of putting more cash into the economy at a time when inflation is running at a 40-year high. Economists credit the combination of government stimulus spending — like direct payments to families and loans to businesses — and supply-chain problems as contributing to the current inflation crisis.

Here's how California's plan will work. 

Where is the money coming from?

The checks are designed as tax refunds, and stem from the state's record-setting $97 billion budget surplus

Who will qualify for an inflation-relief check?

The payments are similar to the stimulus checks sent by the federal government in that they are based on income, tax-filing status and household size. 

Lower- and middle-income Californians stand to receive the biggest checks. 

  • Single taxpayers who earn less than $75,000 a year and couples who file jointly and make less than $150,000 a year will receive $350 per taxpayer. 
  • Taxpayers with dependents will receive an extra $350, regardless of the total number of dependents. 

In other words, a couple that earns a combined $125,000 and has two children would qualify for $350 per adult plus $350 for their children, for a total of $1,050. 

What about higher-income Californians?

Higher-income residents will receive smaller payments. 

  • Single taxpayers who make between $75,000 and $125,000 a year and couples who earn between $150,000 and $250,000 will receive $250, plus the same payment for their dependents, for a maximum of $750 per family. 
  • Single people who earn between $125,000 and $250,000 and couples who earn between $250,000 and $500,000 annually would receive $200 each, plus the same amount for their dependents. That amounts to a maximum payment of $600 per family. 

How about families who earn more than $500,000?

Couples who earn above $500,000 and single taxpayers who earn above $250,000 aren't eligible for the payments, according to the Sacramento Bee.

When will the checks be issued?

Checks will be sent via direct deposit or debit cards as soon as October, the governor said on Thursday. 

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