Up to $1,050 in tax refund payments started going into the direct deposit accounts of about 23 million Californians on Friday, Oct. 7, state officials said.
These one-time payments known as the Middle Class Tax Refund will be sent to taxpayers through Jan. 15, 2023—as part of the $308 billion state budget signed by Gov. Gavin Newsom in June.
“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 Newsom, Senate President Pro Tempore Toni Atkins (D-San Diego), and Assembly Speaker Anthony Rendon (D-Lakewood) in a joint statement.
The tax refunds are based on 2020 filing status and income, with those making over $500,000 excluded. Single filers get a base $350 if they make up to $75,000; $250 if they make between $75,001 and $125,000; and $200 if they make between $125,001 and $250,000. Married couples with children would get $1,050.
Direct deposits will be issued first, starting Oct. 7 through Oct. 25, according to the California Franchise Tax Board. The second round of direct deposits should hit accounts between Oct. 28 and Nov. 14.
Debit cards will be mailed between Oct. 25 through Jan. 15. The board will release a detailed debit card payment schedule early next month.
This is the second consecutive year Californians will pocket extra money from the state. Last year, residents earning less than $75,000 received up to $1,100.
The rebates are made possible by the state’s $97.5 billion budget surplus.
Increased infrastructure and emergency expenditures, which are exempt in certain circumstances, as well as the tax refunds, will keep the state below the Gann limit—an obscure provision that prohibits spending above a certain level per capita—for the next few years. The Legislature is now considering placing a measure before voters on the 2024 ballot that would loosen the Gann Limit restrictions.
The tax rebate program, which has been publicly debated for months, is the centerpiece of this year’s state budget deal. Under the $9.5 billion plan, more than 95 percent of taxpayers will receive a payment this fall.
To reach Californians who do not file taxes, the state will also increase Supplemental Social Security grants by about $39 per month for individuals and $100 for couples, while welfare grants through CalWORKs will increase by an additional 10 percent for the next two years.
However, many retirees who receive Social Security from the federal government and do not file taxes will still be left out of the program. Officials said the state does not have a way to account for them.
For detailed information on eligibility, payment schedules, and payment information visit the California Franchise Tax Board website https://www.ftb.ca.gov or call (800) 542-9332.
