The Fourth Stimulus Check? It Could Come From Your State, Not the Feds

States move to offer stimulus checks

Two states already have approved their own stimulus checks to help people cope with the lingering financial shocks from the COVID crisis.

Earlier this year, Maryland made direct payments to residents who claimed the earned income tax credit on their 2019 state tax returns. Individuals got $300 and families received $500.

In February, California lawmakers passed the Golden State Stimulus program, with payments of $600 or $1,200; eligibility is based on tax information from the 2020 state returns being filed this year.

Last week, embattled California Gov. Gavin Newsom announced a $100 billion plan that would provide a second round of state stimulus checks for about two-thirds of Californians. Households with incomes up to $75,000 would receive either $600 or $1,100.

The plan was made possible by a surge in tax revenue collected from California’s high-income earners during the pandemic. But it turns out states may not need to use their own money to provide stimulus for their residents.

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Federal money could allow more states to send checks

The pandemic rescue bill President Biden signed in mid-March — the one has given $1,400 stimulus checks to most Americans — also contained $350 billion in aid for state and local governments that can be used to make direct payments.

The U.S. Treasury last week released a set of rules for spending the money, and the guidelines indicate it would be OK for states to distribute stimulus checks similar in size to those paid out by the federal government, which have ranged from $600 to $1,400 per person.

If your state decides to use the funding to dole out COVID relief payments, you'd be eligible if you've "experienced unemployment or increased food or housing insecurity" because of the pandemic, the guidelines indicate. Census data shows most stimulus money is still used for food, rent and mortgage payments.

And while some people have famously been investing in the sizzling stock market with their "stimmies, others have spent the cash on nonessential, but necessary, things including clothes and affordable life insurance. Demand for policies has skyrocketed amid the pandemic.

It's not clear yet which states will take the federal government's money — and advice — and follow California and Maryland by issuing their own stimulus checks.

What about another 'stimmy' from Washington?

Meanwhile, more than 2.2 million Americans aren't giving up on more stimulus checks from Washington. They've signed a Change.org petition calling for ongoing payments of $2,000 until the COVID crisis has passed.

Dozens of Democrats in Congress have been pushing for the same thing, but congressional leaders haven't given any signals. The White House says it's up to Congress to decide whether there will be more direct pandemic support for Americans.

The COVID aid bill providing the latest round of stimulus checks faced challeges on its way to passage, and got over the finish line more through congressional hocus-pocus than through negotiation.

Biden is currently trying to get another $4 trillion in spending approved by a deeply and closely divided Congress, one that includes at least a few fiscally conservative Democrats who may not support the hundreds of billions of dollars in extra funding another round of checks would require.

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Try some do-it-yourself stimulus

If you need a little more financial breathing room to get you through the pandemic, and can't wait for action by your state or the federal government, there are plenty of ways of boosting your cash flow right now.

• Reduce your insurance costs. It’s never a bad time to reevaluate all of your recurring costs, including what you pay for insurance. A few minutes of comparison shopping could help you save serious money on car insurance. The same strategy could help you find a lower price on homeowners insurance.

• Refinance your mortgage. Rates on 30-year mortgages are below 3% again, and if you haven't refinanced in the last year or so, you're missing out on a chance to cut your housing costs. Mortgage data and technology provider Black Knight says 13 million homeowners can now save an average $283 a month through a refi.

• Take control of your debt. If you've been relying on credit cards or other high-cost loans to pay for necessities during the pandemic, the interest will eat into your finances until those debts are paid off. But you can slash your interest charges — and pay off those debts faster — by rolling them into a single, lower-interest debt consolidation loan.

• Grow your pocket change. After recovering from the turbulence of the pandemic’s early days, the stock market has been flying high. You don't need another $1,400 stimulus check to take part in the fun. A popular app allows you to invest in a diversified portfolio with nothing more than "spare change" from everyday purchases.