California Stimulus Details
If you pay attention to the news at all, then you have probably heard the word “stimulus” countless times, that or “relief package”. Well when you have heard these words, it is also likely that it has only been on a federal level. Up until this point, state-issued relief packages have not really been talked about. Well now that seems to be changing a little bit, as a few states have begun to act in an effort to help the people stay afloat economically after all of the damage caused by the pandemic’s endless destruction. The most notable of these stimulus packages comes from California. What makes this package so notable and talked about? Well, that is what we are here to tell you. Let’s go into a small breakdown of this package and all of its most important pieces.
As of the time of writing, the California relief package amounts to 7.6 billion dollars, but could grow even more, as there is a separate 2 billion-dollar bill that is yet to go to vote. We could be seeing that bill go through within the next week. As for what is in the part of the package that has already passed, we will start with the stimulus checks. As I am sure you can deduce from that statement, qualifying people in California will be receiving checks as part of the package. These checks will be $600 each. In total there are approximately 5.7 million residents in the state that will be receiving these payments, and the total cost for all of these payments will settle around $3.7 billion. So what conditions need to be met for someone to qualify for this stimulus check? There are actually two different scenarios for qualification here. Firstly, you can qualify for the payment if you make $30,000 or less as your annual income. If you fall under this category, then you will be getting that payment by claiming it through the California earned income tax credit on your 2020 tax returns. This condition for qualification is said to be the most frequent and populated of the two. The other way you can qualify is by having an annual income of $75,000 and using an individual taxpayer identification number, (itin), for filing your income taxes. Reportedly, most of the people who will be falling under this category are either immigrants or those that for whatever reason could not claim the last federal stimulus check. If you are a California resident and have questions about the qualifications for this 600-dollar payment, then make sure to visit your state’s official website. You can always get the full information there.
Next we move into the other main part of this package, and that is the money for small businesses. If you take a look around, whether in California or anywhere else, you will notice just how devastated small businesses are after all that the pandemic has caused. So many are struggling to stay afloat, with many on their last legs. This area of the package aims to help as many of those businesses as possible. This all started back in November of 2020, when governor Gavin Newsom managed to set aside $500 million for small businesses who were struggling. In the program that followed, there were 344,000 applications, totaling about $4.4 billion. With that in mind, the state legislature, along with the governor, did what they could to add as much money to the package for small businesses as possible. The result of this was about 4 billion dollars being set aside for the program. In order to qualify for this, your business needs to make anywhere between $1,000 to $1.5 million in annual revenue. The program itself is meant to mainly support small businesses run by women, those run by minorities, or those that reside in areas with extremely high unemployment rates. This is also where the bill that has not been passed yet comes into play. This bill would allow for businesses to deduct over $150,000 in expenses covered by federal loans from their taxes. The budget for this bill is said to be sitting at about $2.3 billion.
Just to add a couple of notes about the situation in California at the time of writing: At this time there is still a ban on indoor dining across most of the state. There is also still a limit on how many people can enter retail establishments at the same time. With that being said, however, there might be some spots of light out in the distance. Over the past couple of weeks the state has seen a drop in the rate of new cases of Covid-19. Beyond that there has also been a drop in the number of hospitalizations due to Covid-19. It is because of this improvement that restrictions will be getting lifted bit by bit. Starting on Tuesday, March 2, restrictions will be getting loosened across five counties. Governor Newsom has said that residents can expect more of that as the weeks go on as long as things progress as hoped.
As I said at the beginning, state-issued relief packages have been what can only be called rare up until this point. While a couple others have found their way to the news, such as Maryland’s, none have really been as talked about as the one in California. This could very well open the door for other states to do the same thing in the future. However, this is definitely not a guarantee, so don’t get too excited if you live in another state. For now, we will just have to watch the progress of the federal stimulus package and see where that takes us.