California will pocket millions from un-issued Middle Class Tax Refunds to balance its budget shortfall.
In a live presentation of the state’s budget plan on May 12, California Gov. Gavin Newsom said one of the solutions to balance the budget’s roughly $32 billion deficit is to “pull back” $1.1 billion in unspent one-time funds including the tax refunds.
“No one who was eligible was shorted,” said H.D. Palmer, a spokesman with the California Department of Finance.
In an email to The Bee, Palmer said there was a roughly $200 million difference between the estimate and the actual program’s statistics. Meaning, certain groups — people who died, moved or were incarcerated — become ineligible to receive their payment by the time the money was processed.
Last year, Newsom offered to return $9.5 billion to eligible California taxpayers in one-time payments of up to $1,050 to help with inflation and high gas prices.
In July 2022, the Legislature passed the “inflation relief” bill, authorizing the California 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 were eligible for relief checks. Payments were capped at one dependent.
As of Monday, the state has issued $9.2 billion to qualifying taxpayers, according to the tax board. The payment scheduled wrapped in February.
“These are funds that would naturally be swept up anyway that we are fast-tracking and prioritizing,” Newsom said on May 12 during the revised budget plan presentation.
According to the tax board, qualifying Middle Class Tax Refund recipients must have:
Been a California resident for at least six months of the 2020 tax year and been a resident when the payment is issued
Met one of the several California-adjusted gross income tiers
Filed your 2020 tax return by Oct. 15, 2021
Not been eligible to be claimed as a dependent in the 2020 tax year
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