Will States Give Out Stimulus Checks in 2023?

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KEY POINTS

  • The federal government did not issue any stimulus rounds in 2022.
  • While some states stepped up in that regard, whether they do so next year is up for debate.


It's something a lot of people are eager to know.

Inflation has been surging since the start of the year, and it's forced Americans to make serious cutbacks. Some have stopped spending money on leisure. Others have pulled the plug on small luxuries, like streaming services and store-bought coffee. And then there are those who have had to cut back on essential items like food and medication in the absence of having savings to tap when their paychecks ran out.

Unfortunately, the federal government hasn't been able to do much about inflation. The Federal Reserve thought a series of aggressive interest rate hikes would help cool it down, but so far, its efforts haven't amounted to much.

Compounding the issue is that there's been no federal stimulus aid this year. Last year, many people were eligible for $1,400 stimulus checks under the American Rescue Plan, which lawmakers approved in March. The Child Tax Credit also got a major boost in 2021 which not only increased its maximum value, but also allowed for monthly installment payments that hit bank accounts between July and December.

But lawmakers have not approved any federal stimulus aid this year for one big reason -- the labor market is strong, and as such, economic conditions don't warrant it. In fact, it's easy to argue that a stimulus round this year would've made the issue of inflation worse.

But while the federal government hasn't issued stimulus checks, several states have stepped up and dished out relief to residents. The big question is -- will that practice continue in 2023?

Why state stimulus checks may -- or may not -- be a one-time thing

A number of states had excess funds in their budgets this year, and that's how they got the money to issue stimulus payments. But we can't say with certainty that states will be in that same position in 2023. And if states don't end up with surpluses, they won't have money to share with residents. Plus, even if states find themselves with extra money, they may opt to use it differently next year -- especially if inflation levels start to come down.

That said, some states are actually required to share excess funds with residents rather than reinvest that money in things like schools and infrastructure. So if those states wind up with extra money, residents will have another payday to look forward to. But ultimately, it's too soon to predict whether states will uphold the practice of issuing stimulus checks or not.

Are federal stimulus checks off the table for 2023?

Not necessarily. Many experts have been warning that a recession could hit in the new year. If that scenario comes to be and results in a major uptick in unemployment levels, then lawmakers might respond by issuing stimulus funds. After all, it's a practice they've employed in the past -- not just during the pandemic, but during previous periods of economic distress.

Of course, that's not a scenario anyone should be hoping for. But if those dire recession projections end up coming through, the silver lining is that Americans may be in for another windfall -- either at the federal level, the state level, or both.

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