Despite the turbulent markets, we wanted to share some good news. Several states will be issuing refunds this fall for reasons ranging from excess tax revenue to payments helping families deal with the rising cost of living. There are currently seventeen states¹ that will be sending funds to taxpayers. Please see the full list of participating states included in the footer of this letter. Given the location of many of our clients, we have chosen to spotlight the states below:

California

Beginning sometime between October 2022 and January 2023 some taxpayers in California will receive a payment as part of the “Middle Class Tax Refund.” Eligibility is based on your 2020 state income tax return with phase out limits at $250,000 for individuals and $500,000 for joint filers. These funds will be distributed via direct deposit or debit card automatically. The maximum amount to be received will be $1,050 and your expected amount can be calculated at the California Franchise Tax Board site.

Massachusetts

The Commonwealth of Massachusetts will be sending tax rebate checks to taxpayers who filed a 2021 tax return before October 17, 2022. Under state law, Massachusetts is required to disperse tax revenue collections that exceed the annual tax revenue cap set – in Fiscal Year 2022 there was a $2.9-billion-dollar surplus. The Executive Office for Administration and Finance has established a website with additional information and a refund estimator calculator. In general, the refund will be 13% of a taxpayer’s 2021 income tax liability. The following taxpayers are eligible: both resident and non-resident filers, non-resident on whose behalf a partnership files on a composite basis and fiduciary (trust & estate) filers. There is no phase-out to this refund, nor is any action required to receive it. The refund disbursements are expected to begin in November of this year.

Virginia

The Virginia Department of Revenue in late October will begin issuing one-time payments of $250 for individuals and $500 for couples filing jointly. Approximately 3.2 million Virginia residents will qualify so long as they have filed their return before November 1 of this year with a tax liability. While most taxpayers will receive this disbursement via direct deposit or check, factors such as disability, social security and unemployment income may impact eligibility. The Virginia Tax site has created an eligibility calculator to determine the amount a taxpayer can expect to receive. Disbursements are being issued in the order of returns received and no action is needed to receive this payment.

If you receive one of these refunds, please let your Counselor know prior to preparation of your 2022 income tax return.  

If your state is not listed and you would like some additional clarification or have questions on if you qualify, please don’t hesitate to reach out to your counseling team or contact us with any questions.

[1] States include California, Colorado, Delaware, Florida (not highlighted above as benefits are minimal), Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, New Jersey, New Mexico, New York, Pennsylvania, South Carolina, Virginia.  Source

The information provided above is general in nature and is not intended to represent specific investment or professional advice. No client or prospective client should assume that the above information serves as the receipt of, or a substitute for, personalized individual advice from GW & Wade, LLC, which can only be provided through a formal advisory relationship. Tax laws referenced and specific rates are subject to change.

Investment advisory services offered through GW & Wade, LLC.

Clients of the firm who have specific questions should contact their GW & Wade Counselor. All other inquiries, including a potential advisory relationship with GW & Wade, should be directed to:

GW & Wade, LLC
781-239-1188
info@gwwade.com