Many Americans were disappointed to see 2021 come to an end without receiving a fourth stimulus check in their bank accounts. But will a new year mean a new windfall to look forward to?
Right now, there's no indication that lawmakers are looking to send out another stimulus check. But that doesn't mean we should definitively write one off. Here's why we may – or may not – see another stimulus payment come in.
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Why there could be a fourth stimulus check
We're starting off 2022 with a surge of COVID-19 cases, fueled by the highly transmissible omicron variant. Health experts are saying that cases could peter off by late January. But if that doesn't happen, and the outbreak persists, we may be in for months of disruptions.
That scenario could force businesses to shut down and layoffs to ensue. If that were to happen, and the economy were to decline, then it could make the case for another stimulus payment.
► Record inflation: Consumer prices jump 7% in 2021 to highest rate in 39 years
Why there may not be a fourth stimulus check
It's true that the U.S. is deep in the throes of a major COVID-19 outbreak – one that threatens to overwhelm hospital systems, force schools into remote learning, and impact supply chains. But the silver lining is that omicron is said to result in milder illness than its predecessors, which means it may not be as disruptive.
Furthermore, the CDC recently updated its guidelines to shorten the length of quarantine for those diagnosed with COVID-19. That could mean fewer workplace disruptions and closures.
All of that would be a good thing for our economy. And speaking of the economy, it continues to improve. In December, the national jobless rate dropped to 3.9%, the lowest level since the start of the pandemic. Additionally, the labor market is loaded with jobs right now, so much so that many companies are raising wages in an effort to attract talent. This is a very different scenario than the one that presented in March 2021, when the most recent stimulus check was approved.
Finally, lawmakers aren't looking to impose massive shutdowns to combat the current COVID-19 surge like they did early on in the pandemic. That alone could prevent a massive wave of layoffs.
► Powell says high inflation poses major threat to job market: Comments raise possibility of faster rate increases
What to do if there's no more stimulus aid
The idea of not getting another stimulus check may be disappointing, especially at a time when inflation is rampant and everything seems to cost more. But you can still take steps to boost your income.
First, research salary data to see if you're being paid a fair wage where you work. If not, you can either fight for a raise or dust off your resume and seek out a new employment opportunity. Or if you're looking for extra work, the gig economy is still very much alive, which means you have a chance to take on a side hustle for extra money.
You can also put yourself on a stricter budget if you're struggling to make ends meet. That could mean cutting back on some expenses temporarily until the cost of living dips back downward.
Of course, if the economic situation takes a drastic turn for the worse, then a follow-up stimulus round could be in the cards. But that's a scenario no one should hope for.
► What is driving US inflation to a 39-year high? The reasons and solutions are complicated
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Having hit a peak of 9.1 percent in June, has dropped to 8.5 percent last month, an encouraging sign that the Federal Reserve's efforts to cool down surging prices might be working. But millions in the U.S. are still struggling, with the cost of living continuing to increase.
To help residents whose household budgets have been severely dented by rising food, gas and housing prices, several states —including Delaware, Florida, Georgia, Hawaii, Indiana, Minnesota and New Mexico— have already started rolling out direct payments. Others are preparing to do so.
Check out which states and residents are eligible for a stimulus check in the coming months below:
California
California is getting ready to issue another round of direct payments to millions of residents, this time in form of a tax refund of up to $1,050 called the "Middle Class Tax Refund."
State leaders say an estimated 23 million people qualify for the checks, which will be sent out between October 2022 and January 2023.
The payment is only available to residents who have lived in California for at least 6 months in the 2020 tax year or who are living in the state by the time the check is issued.
To receive the payment, Californians must have filed their 2020 tax return by October 15, 2021, must have not been a dependent in the 2020 tax year and need to meet the state's adjusted gross income (AGI) limits described here.
Payments will be issued by direct deposit or debit cards, and the amount will depend on income. To calculate how much you may be qualified to receive, check this estimator here.
The smallest amount issued will be $200, while the largest is $1,050.
Colorado
Colorado is giving a tax rebate of $750 for individual filers and $1,500 for married couples filing jointly this summer, called the "Colorado Cash Back."
The one-time payment was approved on May 23 by Governor Jared Polis, who said his administration was working hard to get the money into the wallets of Coloradans this summer instead of in spring 2023, when refunds to taxpayers are normally issued.
To be eligible, residents must:
- Be at least 18 on or before December 31, 2021;
- Be a resident for the entire 2021 income tax year;
- And file a state income tax return for the 2021 income tax year or apply for a Property Tax/Rent/Heat Credit (PTC) Rebate by June 30, 2022.
Payments are expected to be issued by September 30, while those who have filed an extension with the Internal Revenue Service (IRS) have the June deadline pushed to October 17 and can expect to receive the checks by January 31, 2023.
Illinois
In early July, Illinois launched the state's $1.83 billion Family Relief Plan, which included income and property tax rebates as well as a temporary cut in several sales taxes, such as the suspension of the 1 percent sales tax on groceries through June 30, 2023.
The state is also issuing tax rebate checks of $50 for individual filers who made under $200,000 in 2021 and of $100 for joint filers with incomes under $400,000.
Filers who claimed dependents last year are also eligible to receive a $100 credit per child, with a limit of three child credits per household.
Checks will be sent out to all of the estimated 6.2 million taxpayers who qualify during the week of September 12, according to a press release from the State of Illinois' website, and distribution will take roughly eight weeks.
Massachusetts
The situation for stimulus checks in Massachusetts is still unclear, as legislation to approve $250 one-time payments for qualifying residents recently failed to pass.
A decision on whether the state will be able to issue tax credits will be made by the State Auditor by September 20, and, if implemented, the payments will be issued before the end of the month, according to local media.
Meanwhile, Massachusetts residents are getting the state's excess in tax revenue that, by an obscure 1980s law, Massachusetts has to return to taxpayers, which this year would be over $2.5 billion. Governor Charlie Baker said that residents would receive a 7 percent refund of their 2021 state income tax payment.
South Carolina
South Carolina's Governor Henry McMaster signed a bill in June ensuring eligible residents receive checks of up to $800 in income tax rebates.
To qualify for the one-time payment, you must have filed individual income tax returns by October 17. The amount of the payment will be determined after October 17 according to income.
Delivery of the checks is for November and December, with the South Carolina's Department of Revenue's official website saying payments will be issued before December 31.
Virginia
Virginia's taxpayers who had a tax liability last year—the amount of tax they were owed throughout the year minus any credits— are eligible to receive a tax rebate of $250 for individual filers and $500 for joint filers.
If you qualify for the payment and have filed your taxes by July 1, you can expect to receive your tax rebate by October 31. To receive the payment you must file your taxes by November 1.