Stimulus Update: Your Next Stimulus Check Could Come From a Surprising Source

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  • The first three stimulus checks came from the federal government.
  • The federal government usually steps up to provide relief during tough economic times.
  • This year, though, it is individual states that are more likely to act.

Don't count on the federal government to provide more stimulus money.

During the COVID-19 pandemic, the federal government provided three different stimulus checks. The payments came both during the Trump administration and the Biden administration. As a result, many people who are hoping for more stimulus money are looking to Washington D.C. for financial relief.

The reality, though, is that Congress is extremely unlikely to act to provide a fourth direct payment into people's bank accounts. This doesn't mean that more money won't be coming though. Another check could arrive, but odds are that it will come from a different source.

If there's a fourth check, here's where it will come from

If an additional payment is provided to help people cope with the ongoing economic fallout of the COVID-19 pandemic, the most likely source of the money is individual state governments.

Many states currently have a financial surplus or have extra funds in their budget in large part because of financial assistance that the federal government offered to these states in the past coronavirus relief bills. And a vast number of them have decided to use this money to offer direct relief to their residents who need it the most.

Currently, at least 20 different states across the U.S. have already sent checks to people who live within their borders or are planning to do so in the very near future. While this is more common in so-called "blue states" where Democratic leaders are in control, there have been some efforts in "red states" that are under Republican leadership to provide direct payments as well.

State relief efforts vary, but many are offering direct payments to working families

While the federal government was able to send out the same payments to most eligible adults and dependents from the IRS, the stimulus relief being offered by states varies dramatically from one place to another.

In California, for example, multiple payments have already been sent out and a $1,050 "Middle Class Tax Refund" is expected to begin going out in October. In Indiana, on the other hand, checks will total around $125.

Because not every state has moved to offer financial help, and because the rules and eligibility requirements differ, individuals will need to check the local Department of Revenue where they live in order to find out if payments will be forthcoming. For the most part, however, in the states that are acting, the focus is on offering relief to middle class and low-income families and there is often, but not always, an income limit on who gets the funds.

If you're likely to fall within the group who gets paid, it's definitely worth your time to keep up to date on any stimulus news where you live since the chances of federal relief for the country as a whole are small.

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