In 2022, several states with large budget surpluses opted to send out stimulus checks to eligible residents. While most of these payments have already been claimed, there is still a lot of money left on the table. Keep reading to learn everything you need to know about state stimulus checks in 2023.
States That Issued Special Payments
Over the course of 2022, 21 states passed legislation authorizing special payments to residents. Each state adopted its own formula for determining payment amounts and how residents qualify for relief. These payments fall into one of several tax categories, including rebates, refunds, general welfare, or disaster relief payments. The states that passed stimulus relief in 2022 include:
Most of these states issued payments during the 2022 calendar year, but several scheduled payments through 2023. States with 2023 payment windows include California, Colorado, Idaho, Maine, Massachusetts, New Jersey, New Mexico, Pennsylvania, Rhode Island, South Carolina, and Virginia.
How State Stimulus Checks Are Taxed
The IRS provided additional clarification on the tax treatment of state stimulus payments in February 2023. It declared that it would not challenge the taxability of payments related to general welfare or disaster relief. This means that payments made by the following states are excludable for federal income tax purposes in 2022:
Meanwhile, four states offered refunds on previously paid state taxes: Georgia, Massachusetts, South Carolina, and Virginia. Payments from these states are excluded from income for federal tax purposes so long as the recipient either claimed the standard deduction or itemized deductions but did not receive a tax benefit.
In the case of Illinois and New York, each state issued both a disaster relief payment and a tax refund under the rules outlined above. Similarly, Alaska issued a non-taxable Energy Relief Payment to qualifying residents in addition to its annual Permanent Fund Dividend, which is taxable.
What We Know About the California Middle Class Tax Refund
California’s Middle Class Tax Refund is available to residents who lived in the state for at least six months in 2020 and filed their 2020 tax return on or before October 15, 2021. You cannot receive the refund if someone else claimed you as a dependent in 2020 or if your income exceeded the allowable limit ($250,000 for single people or married couples filing separately and $500,000 for others).
The refund varies from $200 to $1,050 depending on your filing status, income, and number of dependents. California began distributing payments on October 7, 2022 via direct deposit, but has since switched to sending prepaid debit cards. While most eligible recipients have already received a payment, the state expects to send more payments throughout the first half of 2023.
How Colorado Cash Back Works
Colorado Governor Jared Polis signed Senate Bill 22-233 on May 23, 2022. Better known as Colorado Cash Back, the program grants payments to Colorado residents who lived in the state for all of 2021 and were 18 years of age or older as of December 31 of that same year. Single filers are eligible to receive $750, whereas joint filers receive $1,500.
Colorado began sending out payments on September 30, 2022 to residents who filed their Colorado tax return or applied for a property tax, rent, or heat credit on or before June 30, 2022. However, residents who filed for a tax extension by the October 17, 2022 deadline may not receive a payment until January 31, 2023 at the latest.
Two Rebates for Residents of Idaho, Illinois, and New Mexico
If you live in Idaho, Illinois, or New Mexico, then you may be due two rebates for the 2022 tax year.
Idaho authorized payments for full-year residents who submitted 2020 and 2021 tax returns prior to the end of 2022. The first rebate allows you to claim $75 per family member or 12% of the tax credit before credits, donations, and payments on your 2020 return, whichever is greater.
The second rebate grants the greater of 1) $300 to single filers and married couples filing separately or $600 to married couples filing jointly, or 2) 10% of your income tax liability before credits, donations, and payments on your 2020 return. Idaho rebate payments started going out in March 2022, but the state expects to pay rebates through 2023 to late filers.
Illinois offered both an income tax and property tax rebate in 2022. To qualify for the income tax rebate, you must have been an Illinois resident in 2021 and made less than $200,000 ($400,000 for married couples filing jointly).
Meanwhile, you qualify for the property tax rebate if you paid Illinois property taxes in 2021 and made less than $250,00 ($500,000 for married couples filing jointly).
The income tax rebate grants $50 for each qualifying resident ($100 for married couples) plus $100 for each dependent you claim on your tax return (capped at three dependents). Your property tax rebate varies depending on the value of the property tax credit you claimed in 2021 and is capped at $300.
Illinois began sending payments in September 2022 and will continue sending payments through 2023 until all payments have been distributed.
New Mexico also authorized two rebates to residents in 2022. To qualify for the first rebate, single filers and married couples filing separately must have made less than $75,000 in 2021, while joint filers, head-of-household filers, and surviving spouses must have made less than $150,000.
Qualifying joint filers, surviving spouses, and head-of-household filers each receive $100, while married couples filing separately and single filers each receive $250.
The second rebate is available to every New Mexico resident who filed a 2021 tax return and was not claimed as a dependent by someone else. It grants $500 to single filers and married couples filing separately, and $1,000 to joint filers, head-of-household filers, and surviving spouses.
New Mexico began sending payments in July 2022, and requires residents to file their 2021 tax return before May 31, 2023 to receive either rebate.
Property Tax Rebates For New Jersey and Pennsylvania Residents
New Jersey residents who rented a home or owned property in the state on October 1, 2019, can apply for the ANCHOR Tax Relief Program. Renters who made less than $150,000 in 2019 can get a $450 tax rebate.
Homeowners who made $150,000 or less will each receive $1,500, while homeowners who made between $150,000 and $250,000 will receive $1,000. Payments are scheduled to start going out sometime in late spring 2023.
Pennsylvania’s Property Tax/Rent Rebate program is more restrictive than New Jersey’s. To qualify, you must be either 1) 65 years old (50 years old for widows and widowers) or 2) 18 years old and have a disability. Additionally, Pennsylvania has capped the annual income limit for 2022 at $35,000 for homeowners and $15,000 for renters.
The rebate for homeowners ranges from $250 to $650, while renters can receive anywhere from $500 to $975. The deadline to apply for the rebate was December 31, 2022, which means payments will continue to go out during the first few months of 2023.
Rebates for Delaware, South Carolina, and Virginia Residents
If you owed taxes on your 2021 South Carolina tax return, then you may be due a refund. To claim your refund, you must have filed your 2021 state income tax return prior to February 15, 2023. The amount of the rebate varies depending on your 2021 income, tax liability, and credits, but won’t exceed $800.
South Carolina has already issued payments to residents who filed their 2021 tax return prior to October 17, 2022. If you filed after October 17, 2022, and before February 15, 2023, you should receive your refund prior to March 31, 2023.
Like South Carolina, Virginia also issued a tax refund in 2022. To be eligible, you must have had a net tax liability on your 2021 Virginia tax return and filed before November 1, 2022. The amount of the rebate varies depending on your 2021 Virginia tax liability but is capped at $250 for single filers and $500 for joint filers.
Virginia started sending payments in 2022 and you can expect to receive your payment within four months of filing your tax return.
Although most states that authorized stimulus payments in 2022 have already sent out payments, some late filers could still receive a payment in 2023. Make sure to review the terms and conditions of claiming your rebate or refund if you live in any of the states listed above.
Reach out to a local tax professional if you’re uncertain whether you qualify for a stimulus payment and what you need to do in order to meet filing guidelines.