Summer Stimulus Checks: The List of States That Are Giving Back to Taxpayers

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Stimulus Checks: What American states are sending tax rebates during the summer? –

The COVID-19 pandemic has had a devastating impact on the economy and the livelihoods of millions of Americans. To help ease the financial burden, the federal government has issued three rounds of stimulus checks to eligible individuals and families since March 2020. However, some states have also decided to provide additional relief to their residents by sending out tax rebates or refunds this summer.

According to the Tax Foundation, a nonpartisan think tank, at least nine states have announced plans to return some of the excess revenue they collected in fiscal year 2021 to taxpayers. These states are Arizona, Colorado, Idaho, Iowa, Maryland, Michigan, Montana, New Mexico and North Carolina. The amounts and eligibility criteria vary by state, but generally they are based on income levels or tax liability.

Here is a brief overview of what each state is offering:

Arizona: The state legislature passed a $1.9 billion income tax cut that will benefit all taxpayers, but especially those earning less than $50,000 a year. The average rebate is expected to be $350 for single filers and $700 for married couples.
Colorado: The state is issuing a one-time tax refund of $70 to $174 for single filers and $140 to $348 for married couples, depending on their income. The refund is triggered by the state’s Taxpayer’s Bill of Rights (TABOR), which limits how much revenue the state can keep each year.
Idaho: The state is sending out rebate checks of up to $50 per person or $100 per household, plus 9% of the income tax paid in 2019, to taxpayers who filed a 2019 or 2020 return. The minimum check amount is $50 and the maximum is $1,000.
Iowa: The state is issuing a 10% income tax cut retroactive to 2021, which will result in lower withholding and higher refunds for taxpayers next year. The tax cut is part of a larger tax reform package that was enacted in 2018 and contingent on revenue growth.
Maryland: The state is providing a tax credit of $300 for single filers and $500 for married couples who filed for the earned income tax credit (EITC) in 2019 or 2020. The credit will be automatically applied to their 2021 taxes or sent as a check if they don’t owe taxes.
Michigan: The state is sending out checks of up to $1,200 per person to retirees who paid income taxes on their pensions or retirement benefits in 2018. The payments are part of a settlement of a lawsuit that challenged the state’s taxation of retirement income.
Montana: The state is returning $12 million to taxpayers as part of a new law that requires the state to refund any revenue above a certain threshold. The average rebate is estimated to be $46 for single filers and $92 for married couples.
New Mexico: The state is providing a one-time tax rebate of $600 to single filers and $1,200 to married couples who earn less than $75,000 a year and claimed the EITC or the working families tax credit (WFTC) in 2020. The rebate will be mailed or direct deposited by August 31.
North Carolina: The state is sending out stimulus checks of $500 for single filers and $1,000 for married couples who earn less than $150,000 a year and filed a 2020 return. The payments are funded by the state’s share of the federal American Rescue Plan Act.

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If you live in one of these states, you may be eligible for some extra cash this summer. However, you should also be aware of the potential tax implications of receiving these payments.

Depending on your situation, you may have to report them as income on your federal or state tax returns next year. You may also want to consult with a tax professional if you have any questions or concerns about how these payments affect your taxes.

ranjita shalgar
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