Payments to Low Income Households in CA’s Relief Package

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California state leaders have announced an upcoming round of direct-stimulus payments within a larger economic relief package for households and businesses suffering from the state’s lingering economic hardships due to the COVID-19 pandemic.

Since the state’s economic payments would be narrowly targeted, most credit unions should not experience the same surge in member deposits that they saw during the last two rounds of congressional-enacted Economic Impact Payments from the federal government in 2020.

Nonetheless, credit union leaders and branches should be aware of California’s plan and can prepare. The state’s impending package includes 5.7 million payments to low-income Californians.

Direct Relief to Individuals and Families
The agreement — reached between Gov. Gavin Newsom, Senate President pro Tempore Toni Atkins, and Assembly Speaker Anthony Rendon — incorporates the governor’s Golden State Stimulus Plan to assist California households that have borne the disproportionate economic burden of the COVID-19 Recession. These households include individuals with incomes below $30,000, as well as those “unfairly excluded from previous federal stimulus payments,” according to a news release by the governor’s office.

It would provide $600 in one-time relief to households receiving the California Earned Income Tax Credit (EITC) for 2020. In addition, the agreement provides a $600 one-time payment to taxpayers with Individual Tax Identification Numbers (ITINs) who were precluded from receiving the $1,200 per-person federal/congressional payments issued last spring and the more recent $600 federal payments Iast winter.

It also would provide the $600 payments to households with ITINs and income below $75,000. ITIN taxpayers who also qualify for the California EITC would receive a total of $1,200. The payments will be provided to these households shortly after they file their 2020 tax returns.

Additionally, the agreement broadens the initial plan and now provides direct relief to more lower-income Californians through a $600 one-time grant to households enrolled in the CalWORKS program and recipients of SSI/SSP and Cash Assistance Program for Immigrants (CAPI). Grant payments for CalWORKS households are expected by mid-April, and timing for the delivery of SSI/SSP and CAPI grants is currently under discussion with federal officials.

Other Provisions in State’s Relief Package
You can view the governor’s news release about other economic aid provisions in the agreement, including:

  • Immediate relief for small businesses quadrupled
  • Fee waivers for most impacted licensees
  • More resources for critical child care
  • Additional aid for individuals and families
  • Emergency financial relief to support community college students
  • CalFresh student outreach and application assistance
  • Restoration of reductions

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