Not everyone will get California ‘inflation relief’ money. Here’s why you might not qualify

Most Californians who filed their 2020 taxes will receive a one-time payment of up to $1,050 in the state’s inflation relief effort, meaning some low-income residents won’t see the money.

Sacramento resident Jamie Strong emailed The Bee Thursday, the same day Gov. Gavin Newsom signed Assembly Bill 192 into the state budget, and asked if people who did not file taxes for any reason (they weren’t legally required to because of low income or otherwise), would qualify. The Bee received numerous calls asking the same.

The Bee’s service journalism team interviewed H.D. Palmer, a spokesperson for the California Department of Finance, and consulted the California Franchise Tax Board’s to answer the question. Here’s what we found:

Simply, it boils down to whether or not you filed your taxes.

“Basically, if you did not file a 2020 tax return for whatever reason, you would not be eligible for this refund...and you can’t do it prospectively now,” said Palmer, whose department serves as the Newsom administrations spending adviser.

California’s ‘Middle Class Tax Refund’

After weeks of negotiations and a leaked tentative agreement, the legislature passed the “inflation relief” bill, authorizing the Franchise Tax Board’s “Middle Class Tax Refund” where joint filers making up to $500,000 in 2020 and single filers making up to $250,000 are eligible for relief checks. Payments are capped at one dependent.

Those who didn’t file their 2020 tax return by Oct. 15, 2021 —the extension deadline — are not eligible, according to the tax board’s website. The only exception is for people who applied for an individual taxpayer identification, didn’t receive it by Oct. 15 and filed their 2020 tax return by Feb. 15, 2022.

“A lot of individuals who didn’t actually owe California taxes still filed a California tax return, either to get a refund from their withheld taxes or to get an income tax credit,” Palmer said.

In 2020, an additional 500,000 low-income tax returns were filed in California by residents presumably looking to qualify for a Golden State Stimulus or a federal relief payment, Palmer said.

In Newsom’s plan, first introduced in the spring, vehicle owners would pocket between $400 to $800 in debit cards, depending on how many cars they owned, to help with rising gas prices. But legislative leaders wanted an income-limited plan for taxpayers — which is what eventually was decided.

Am I eligible for California inflation relief?

Eligible Californians who electronically filed their 2020 tax return and “indicated direct deposit” will receive a direct deposit payment, according to the tax board’s website. Everyone else will get a debit card.

To qualify for the money, you must:

– Have been a California resident for at least six months of the 2020 tax year and be resident when the payment is issued

– Meet one of the several California adjusted gross income tiers

– Have filed your 2020 tax return by Oct. 15, 2021

– Have not been eligible to be claimed as a dependent in the 2020 tax year

How much money will I get?

The money, which is estimated to hit by the end of October through January 2023, will range depending on how you file and your annual income. Meaning, the more you make, the less you should expect from California’s inflation package.

In Sacramento, for example, the median household income is roughly $65,800, according to the U.S. Census Bureau. That income falls in the first category: single filers who make less than $75,000 a year will receive $350 and joint filers making less than $150,000 will receive $700.

Filers who fall in the first category will receive an additional $350 if they have at least one dependent.

Here’s how much money you could pocket from California’s new inflation refund, according to the tax board’s website, last updated July 1:

JOINT RETURNS

Income of $150,000 or less: $1,050 with dependent or $700 without.

Income of $150,001 to $250,000: $750 with dependent or $500 without.

Income of $250,001 to $500,000: $600 with dependent or $400 without.

HEAD OF HOUSEHOLD

Income of $150,000 or less: $700 with dependent or $350 without.

Income of $150,001 to $250,000: $500 with dependent or $250 without.

Income of $250,001 to $500,000: $400 with dependent or $200 without.

SINGLE FILERS

Income of $75,000 or less: $700 with dependent or $350 without.

Income of $75,001 to $125,000: $500 with dependent or $250 without.

Income of $125,001 to $250,000: $400 with dependent or $200 without.

The Franchise Tax Board has a “Middle Class Tax Refund” calculator California residents can use to estimate their upcoming payment and whether or not they qualify.