Stimulus 2023: No, You Won’t Receive Checks in March
In spite of optimism that some states may extend pandemic stimulus payments to help consumers manage inflation, it doesn’t look like any federal stimulus payments will hit bank accounts for March — or any time in the near future.
See: Could State Stimulus Checks Be Red Flag for IRS Tax Audit?
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For another stimulus check to arrive in 2023, Congress would have to pass a law authorizing more stimulus funds. Although many Americans are struggling with inflation (and SNAP emergency benefits also ended in February), increasing spending power would likely not reduce inflation. If people had more to spend on consumer goods, demand would continue to increase. With supply chains not entirely straightened out from the pandemic, this could lead to shortages, which would drive up prices.
Although the idea of receiving extra money to offset inflation in the form of stimulus relief checks may sound appealing, it would likely have unintended consequences of further fanning the flames of inflation. While stimulus money wasn’t the sole cause of inflation, but was certainly a contributing factor.
So, how did Americans spend past funds? And where are the reports of additional stimulus funds coming from? Let’s take a look at the history.
History of Stimulus Checks and Child Tax Credit (CTC)
When the pandemic first began, Americans received $1,200 in April 2020. This money helped those who were furloughed, laid off or unable to work and had little-to-no money coming in. When this first round of checks arrived, most used it for necessities, GOBankingRates previously reported.
Another $600 in stimulus funds arrived between December 2020 and January 2021, as part of the American Rescue Plan Act. This time, about half of all recipients used the money to pay down debt. By March 2021, Americans received another $1,400 in stimulus payments. About 33% of recipients put this money into a savings account.
In addition to stimulus funds, taxpayers with children received an enhanced Child Tax Credit worth $3,600 for children under 5, and $3,000 per child up to the age of 17, with half of that money delivered up front.
Is Inflation Relief Real?
Several states have issued tax refunds that are, essentially, an extension of stimulus funds. A handful of states have introduced legislation to provide taxpayers with additional funds as a form of inflation relief. Most of this money comes from budget surpluses in various states.
If you live in one of these states and haven’t received your money yet, you can contact your state tax department for the status of your money. But, on a federal level, stimulus funds do not appear to be on the table at the moment as part of inflation relief.
Good News for Inflation Relief and Taxes
There is one bright side for Americans concerned about their financial future: In most states, any inflation relief checks you received are not taxable. But the IRS did not come to this decision lightly. As recently as Feb. 3, the IRS had advised Americans to wait to file their tax returns “until additional guidance is available.”
Ultimately, the IRS decided that, in most cases, these inflation relief or stimulus funds are not taxable income. Of course, it’s wise to speak with a knowledgeable tax professional if you have questions.
There are also a few exceptions to be aware of. In Alaska, you’ll need to claim your Permanent Fund Dividend as income, but not your Energy Relief Payment. In Georgia, Massachusetts, South Carolina and Virginia, you will have to declare state payments as income unless the payment was a state tax refund and you claimed the standard deduction, or itemized deductions with no tax benefits.
Additionally, stimulus funds received during the pandemic were not taxable on tax returns filed in 2022.
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Your taxes may look different when you file in 2023 versus 2022, with a lower Child Tax Credit and slightly different tax brackets. But at least residents in most states don’t have to worry about paying taxes on state inflation relief money received.
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