The California State Assembly — the lower house of the California State Legislature — recently passed legislation to offer inflation relief to California residents who filed their 2020 taxes along with addition tax-relief legislation. In this post, we touch on the key points of the new legislation.

Better for Families (Inflation Relief) Tax Refund

California Assembly Bill No. 192 establishes what is commonly referred to as the “Inflation Relief Tax Refund.” This bill authorizes a one-time tax refund of up to $1,050 for married filing jointly (MFJ) taxpayers with California Adjusted Gross Income (AGI) of up to $500,000 with a dependent and up to $700 payment for qualifying individual taxpayers with California AGI of up to $250,000 with a dependent.

Payments will be distributed starting late October (the earliest) with the last batch expected to be sent by the middle of January 2023.

To qualify to receive the refund, you must meet the following criteria:

• Filed your 2020 tax return by October 15, 2021. If you didn’t file your 2020 tax return by this date, you’re not eligible for the refund. However, if you applied for an Individual Taxpayer Identification Number (ITIN) and had not received it by October 15, 2021, you must have filed your complete 2020 tax return by February 15, 2022.
• Have a 2020 California adjusted gross income (AGI) of $500,000 or less (married filing jointly or head of household) or $250,000 or less (single filer)
• Have been a California resident for six months or more of the 2020 tax year
• Have not been eligible to be claimed as a dependent in the 2020 tax year
• Are a California resident on the date the payment is issued

If you qualify, you will receive a direct deposit payment (if you filed your return electronically and indicated direct deposit on your tax return); otherwise, you’ll receive payment in the form of a debit card.

The payment amount you can expect depends on your adjusted gross income (AGI): Continue reading…