When consumers have extra cash, they are more likely to eat out. / Photo courtesy of Shutterstock.
The state of California began sending about $9.5 billion in remittances to 23 million California residents this week.
Called the Middle Class Tax Refund, the California relief check puts up to $1,050 back into the pockets of eligible Californians. Relief funds will be issued to those eligible for direct deposit beginning October 7, and others will begin receiving checks in the mail this week.
And Californians aren’t the only ones getting booster shots of cash.
Taxpayers have already received relief ranging from $400 to $1,700 in Georgia, Colorado, Delaware, Illinois, Indiana, Idaho, Minnesota, Maine, New Mexico and South Carolina. or will receive it soon.
The goal is to help Americans struggling with inflation and rising interest rates, but some economists say handing out cash could lead to higher prices and make things worse. .
However, restaurants, especially QSR brands, are expected to benefit from the financial bonus.
When the first checks of the stimulus package began arriving in American bank accounts last year, the restaurant industry quickly took off.
After the first round of stimulus checks took place in December 2020, consulting firm Revenue Management Solutions (RMS) saw potential sales uplift ranging from about 3% to 12%. One QSR client saw a nearly 13% increase in sales and an 8.7% increase in traffic in the first week of January as a direct result.
Of course, the economic environment has changed dramatically since the end of 2020, said Richard Delvalle, senior vice president of consulting at RMS. Consumers are now facing rising costs, from grocery stores to gas pumps.
A recent RMS survey found that 45% of consumers say they are eating out less, with more consumers saying they are opting for cheaper options and value-oriented restaurants.
But a “small cushion” in the form of a relief check could change perceptions to encourage restaurant spending.
Here’s an overview of state relief funds and when cash injections are expected to reach consumers.
California: For couples applying jointly, payments range from $400 to $1,050. $200 to $700 for individuals, depending on income and dependent claims. Payments will be distributed between October 7th and he November 14th for those that allow direct deposit. Debit cards with funds will be delivered between October 25th and January 15th.
Virginia: Taxpayers will receive up to $250 for individuals and up to $500 for joint filers, and rebate checks will be issued to eligible individuals by October 31.
Maine: $850 relief checks have been sent regularly since June to an estimated 858,000 primary users below certain income thresholds.
South Carolina: Lawmakers approved tax refunds in June, and taxpayers who filed their returns by October 17 will receive up to $800. Checks are expected to be issued by the end of the year.
New Mexico: Residents were eligible for two rebates this summer. $250 for individuals below certain income thresholds and $500 for joint filers. Joint Filers and Heads of Households will receive her $1,00 additional rebate and Individuals will receive $500.
Idaho: A refund of $300 for individuals and $600 for joint filers (or 10% of the taxpayer’s 2020 income tax, whichever is greater) will be paid to Idaho taxpayers in the order in which their tax returns are received. It is scheduled to be The State Tax Commission plans to send approximately 800,000 rebates totaling up to $500 million by the end of March 2023.
Indiana: State residents were eligible for two taxpayer refunds totaling approximately $325 for individuals and $650 for joint filings through November 1.
Minnesota: Frontline workers eligible for a pay premium of about $487 were notified by Oct. 7. Governor Tim Walz has proposed sending “Walz checks” of $500 (he’s $1,000 for couples) to residents in states with less than a certain amount of income. Funding will come from a $9.25 billion budget surplus, but it requires congressional approval.
Colorado: Tax refunds of $750 for individuals and $1,500 for joint filers began in the summer, and state officials had promised that Colorado cash-back checks would be issued to everyone who qualifies by the end of September.
Georgia: Over the summer, residents received an additional rebate from their 2020 taxes, from $250 for individuals to $375 for heads of household, and up to $500 for joint filings. The refund was supposed to come out by early August.
Illinois: Couples earning less than $500,000 a year in 2021 and individuals earning less than $250,000 a year are eligible for a property tax credit of up to $300. Additionally, the state offers a $50 income tax refund for couples earning less than $200,000 and a $100 income tax refund for couples earning less than $400,000. Checks were supposed to start shipping on September 12th.
Delaware: The $300 per person one-time payment began in May, but those who haven’t yet received their relief rebate have their last chance to apply in November.
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