Second Golden State stimulus check: how much do dependants and undocumented workers get?
California Gov. Gavin Newsom has pledged to use the state's budget surplus to provide more direct payments and economic relief for Californian families.
In May Gov. Gavin Newsom unveiled details of the California Comeback Plan, the new state-wide relief package aimed at providing fresh impetus to the economic recovery.
One of the main features of the bill was a new round of stimulus checks that is expected to reach two-thirds of all Californians. All taxpayers who make up to $75,000 annually will be sent a direct payment worth $600, provided they did not receive the recent Golden State Stimulus check.
In addition to that families with tax dependents will receive an additional $500 direct payment, regardless of how many dependents they claim. Undocumented workers will also get a further $500 on top of their stimulus check entitlement.
How many people will get the new California stimulus check?
The expansion of the Golden State stimulus checks will see an estimated 9.4 million taxpayers become newly-entitled to the direct payments. This group is largely comprised of those who earnt between $30,000 and $75,000 in 2020, and is slated to cost the state around $5.6 billion.
Taxpayers who claimed dependents on their most recent tax return will be in line to receive the additional $500 payments, bringing their total up to $1,100. It is thought that roughly 4.3 million people are included in this group, meaning that the total cost will be around $2.2 billion.
Gov. Newsom was eager to ensure that children of undocumented workers were not excluded from the vital state-wide support and eligibility has been widened to include an estimated 520,000 taxpayers who usually file with an Individual Taxpayer Identification Number (ITIN). The ITIN is similar to the Social Security Number (SSN) and is used by those not eligible for a SSN to comply with tax laws.
Why is another round of stimulus checks being sent out?
The California Comeback Plan is seen as an expansion of the recent Golden State Stimulus package and is a direct consequence of the state’s record-breaking budget surplus on the previous year.
In May Gov. Newsom announced that the state had achieved a budgetary surplus of $73.7 billion due to increased tax revenues and a stock market surge. Newsom has promised to use the money to boost the state’s post-pandemic recovery but not all are convinced that the additional direct payments is an effective use of resources.
James Hamilton, a professor of economics at UCSD, said that the temptation to overspend is a danger: “There are times when more fiscal stimulus is what the economy needs, but this isn’t one of them.”
He added: “I think inflation and supply shortages will turn out to be the big economic story for 2021. I would encourage the governor to focus on trying to stop the exodus of high-paying jobs from California.”