California Gov. Gavin Newsom (D) announced on Thursday that his state will begin sending tax refunds of up to $1,050 to certain residents.
State lawmakers approved the refunds, which vary in amount based on individuals’ 2020 tax returns, as part of California’s annual budget signed by Newsom in June to aid residents as they face high inflation.
The payments range from $200 to $1,050 depending on if a resident filed taxes as a couple or claimed dependents.
The benefit phases out for higher-income earners, with eligibility extending to individual taxpayers who made $250,000 or less and couples or heads of households who made $500,000 or less.
“We know it’s expensive right now, and California is putting money back into your pockets to help. We’re sending out refunds worth over a thousand dollars to help families pay for everything from groceries to gas,” Newsom said in a statement.
Newsom’s office said the program will lead to 18 million payments to residents.
State officials will first send about 8 million of those refunds through direct deposit to residents who used that payment method to receive their 2020 tax returns. Direct deposit payments will be sent between Oct. 7 and Nov. 14.
The other 10 million eligible taxpayers will receive the payments through debit cards, which will be delivered between Oct. 25 and Jan. 15.
“Inflated costs for everyday necessities have forced many to cut corners or make impossible choices, and pain at the pump has been compounded by the return of the commute for many Californians” said Betty Yee, the state’s controller and franchise tax board chair.
“As the holidays approach, my team members are thrilled to be able to get these payments into the hands of those who have been struggling, so they can enjoy a measure of relief,” she added.
California Democrats approved the proposal after annual inflation jumped to a roughly 40-year high earlier this year.
The budget deal also included a pause on the state sales tax for diesel fuel, which amounted to 3.9375 percent of retail costs.