The New York Department of Taxation and Finance will soon send the state's "first-ever inflation refund" checks.
New York Governor Kathy Hochul first announced the program in May. The one-time payment aims to provide financial relief from higher sales taxes due to inflation, according to the release.
More than 8 million New Yorkers will receive refunds, according to the state. Payments will be mailed starting at the end of September.
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Eligibility is based on filing details from tax year 2023. Those who qualify filed Form IT-201 as a state resident, have reported income within the qualifying thresholds and were not claimed as a dependent on another person's return.
The refund payments range from $150 to $400 — the exact amount paid will depend on the taxpayer's filing status and their adjusted gross income for that year.
There's no need to apply or sign up for the payment. The refund checks will be mailed directly to eligible New Yorkers over several weeks.
You may receive your check "sooner or later than your neighbors," as the payments are not based on zip codes or regions, according to the agency.
Why New York is sending rebate checks
The rebate checks are possible because higher prices led to higher sales taxes, according to Jared Walczak, vice president of state projects at the Tax Foundation. The state of New York generated more revenue than it otherwise would have, he said.
"This rebate check is a response to that," said Walczak.
However, it's not unusual to see state, local and federal governments provide specialized rebate and stimulus checks to taxpayers, he said.
Earlier this year, Sen. Josh Hawley, R-Mo., proposed the American Workers Rebate Act in July, which aims to send tariff rebate checks to households. The bill aims to provide "at least" $600 per adult and dependent child, or $2,400 for a family of four. The legislation has not passed yet. As of late July, it has been referred to the Committee on Finance.
For now, New York seems to be the only state that has recently announced inflation-related rebate payments, said Walczak.
"It doesn't appear as if any [states] are looking at New York right now and choosing to follow," he said.
'A smart move for your future'
If you do qualify for a stimulus check, it's smart to use the additional cash wisely.
"The first priority is shoring up the basics," said certified financial planner Douglas Boneparth, president and founder of Bone Fide Wealth, a wealth management firm in New York City.
For instance, use the cash to "beef up" your emergency fund so you're prepared for unexpected expenses, said Boneparth, a member of the CNBC Financial Advisor Council.
If you have high-interest debt, such as an outstanding credit card balance, consider using the refund to pay down the debt that's "eating away at your budget," he said.
But if you have those fundamental steps taken care of, investing the cash "could be a smart move for your future," Boneparth said.