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California has $200 million left from its inflation relief plan. Where will the money go?

During a live presentation of the state’s budget plan on May 12, California Governor Gavin Newsom revealed that the state would tap into unspent one-time funds, including tax refunds, amounting to approximately $1.1 billion, as part of its efforts to balance the budget and address a deficit of around $32 billion. H.D. Palmer, a spokesman for the California Department of Finance, clarified that no eligible individuals were deprived of their entitled refunds.

In correspondence with The Bee, Palmer explained that there was a discrepancy of roughly $200 million between the estimated and actual statistics of the program. Consequently, certain groups, such as individuals who had passed away, relocated, or been incarcerated, became ineligible to receive their refunds by the time the funds were processed.

Last year, Newsom proposed returning $9.5 billion to eligible California taxpayers through one-time payments of up to $1,050 to alleviate the impact of inflation and high gas prices.

In July 2022, the Legislature passed the “inflation relief” bill, authorizing the California Franchise Tax Board’s “Middle-Class Tax Refund.” This initiative allowed joint filers with incomes up to $500,000 in 2020 and single filers with incomes up to $250,000 to qualify for relief checks.

The payments were limited to one dependent. According to the tax board, as of Monday, the state has disbursed $9.2 billion to eligible taxpayers, with the payment distribution concluding in February.

Newsom emphasized that these funds were already destined to be reclaimed by the state and that their prioritization and expedited use were essential to the revised budget plan presented on May 12.

To be eligible for the Middle-Class Tax Refund, recipients must have met the following criteria, as outlined by the tax board:

  • Resided in California for at least six months of the 2020 tax year and at the time the payment was issued.
  • Met one of several income thresholds adjusted for California.
  • Filed their 2020 tax return by October 15, 2021.
  • Not eligible to be claimed as a dependent in the 2020 tax year.
Jake Massey
Jake Massey
Journalist at the Medialinker Group


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