California inflation relief payments start Friday. Here’s how long it might take to reach you

Roughly 90% of the direct deposits for California’s “Middle Class Tax Refund” are expected by the end of October — some as early as Oct. 7.

Those who will receive debit cards might have to wait a bit longer for their payment.

Residents who filed their 2020 taxes may receive a one-time payment of up to $1,050. Payments will extend through early next year.

Direct deposits will be issued first, starting Friday through Oct. 25, according to the Franchise Tax Board. The second round of direct deposits should hit accounts between Oct. 28 and Nov. 14.

Debit cards will be mailed between Oct. 25 through Jan. 15.

Franchise Tax Board Spokesman Andrew LePage said nearly 95% of all stimulus checks — “direct deposit and debits cards combined” — should be issued by the end of the year.

Who receives a debit card vs. direct deposit?

If you qualify for the refund, your payment will either reach you in a direct deposit or a debit card.

You’ll receive a direct deposit, according to the Franchise Tax Board’s website, if you if 1. e-filed your 2020 tax return and 2. received your refund by direct deposit.

The rules surrounding who gets a debit card a more extensive. You’ll receive a debit card, according to the Franchise Tax Board’s website, if the following apply to you:

  • Filed a paper return

  • Had a balance due

  • Received your Golden State Stimulus payment in a check

  • Received your tax refund by check regardless of filing method

  • Received your 2020 tax refund by direct deposit, but have since changed your bank or bank account number

  • Received an advance payment from your tax service provider or paid your tax preparer fees using your tax refund

Follow the money trail

The $9.5 billion tax refund program, which lawmakers solidified in June and was later nicknamed “Middle Class Refund,” is the state’s response to high fuel prices and the rising cost for other goods and services.

The rebates are made possible by California’s $97.5 billion budget surplus, which swelled with income taxes from high earners during the coronavirus pandemic.

This is the second consecutive year Californians will pocket extra money from the state. Last year, residents earning less than $75,000 received up to $1,100.

Gov. Gavin Newsom originally introduced a plan that would have sent money to people who own cars. The money could have gone out as early as July, one month after California’s gas prices hit a record high of more than $6 per gallon.

But legislative leaders wanted a different approach sending money to households based on income. Newsom adopted the lawmakers’ proposal.

Now, as California gears up to release payments to its qualifying residents, gas fuel prices have shifted.

California motorists are currently paying an average of $5.52 per gallon of regular gasoline, according to the American Automobile Association, nearly 20 cents less than just one month ago and about $1 less than in June.

Am I eligible for California inflation relief?

To qualify for the money, you must:

  • Have been a California resident for at least six months of the 2020 tax year and be a 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.

The program excludes Californians who don’t pay taxes, which means some low-income households won’t receive money.

How much money will I get?

The money, which is estimated to hit by Friday through January 2023, will range depending on how you file, plus 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 Aug. 30:

JOINT RETURNS

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

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

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

HEAD OF HOUSEHOLD

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

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

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

SINGLE FILERS

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

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

  3. 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.

What do you want to know about life in Sacramento? Ask our California Utility Team your top-of-mind questions in the module below or email utilityteam@sacbee.com.