Improving economic conditions after the COVID-19 pandemic has pushed up tax collections for many states. Thus, many states are using this money to offer stimulus benefits to their residents. It is believed that Indiana could re-join this growing list. Indiana is already in the process of sending its first round of tax rebates of $125 triggered by last year’s large tax surplus. Now, the state government is witnessing another budget surplus year, and this could mean more stimulus checks from Indiana.
Growing Budget Surplus For Indiana
The surge in tax collections last year has pushed up the state government’s budget surplus by over 50% to about $6.1 billion, compared to about a $3.9 billion surplus. The Republican-dominated Legislature is reportedly set to take up Gov. Eric Holcomb’s plan to send $225 payments to taxpayers due to the budget surplus.
“Indiana’s economy is growing and with more than $1 billion of revenue over current projections, Hoosier taxpayers deserve to have their money responsibly returned. I’m happy to be able to take this first step and look forward to signing this plan into law as soon as possible,” Gov. Holcomb said last month.
Early last month, Holcomb proposed the plan to return $1 billion from the state reserves to taxpayers. The proposed plan, if approved, would send $225 to individual taxpayers and $450 to couples filing jointly.
Tax collections for the budget year, which ended June 30, increased about 9% from last year. Moreover, the tax collections were about 6% more than the December projections from the state officials.
Will There Be More Stimulus Checks From Indiana?
Several Democrats argue that the Legislature could use the surplus money in better ways, i.e., boosting spending in areas such as public health and education. Even some Republican legislators have questioned the decision of using reserves to send refunds at a time when inflation is pushing up the cost of state construction projects.
Holcomb’s top budget adviser, however, refers to the new refund plan as a “prudent” proposal. Holcomb’s plan is expected to cost the state about $1 billion.
Whether or not more stimulus checks from Indiana will turn into reality is not known for now, but what we do know is that the state is still distributing the first round of tax rebates. The state has yet to distribute over half of the payments under the first round of tax refunds.
According to the Department of Revenue, it has distributed about $250 million in direct deposits of the total estimated $545 million. The physical checks to about 1.7 million taxpayers, who haven’t furnished their bank account information, are likely to go out by mid-August.
The authorities said that the company responsible for printing the checks is facing paper supply delays. Thus, many Democratic legislators argue that such processing issues could delay more stimulus checks from Indiana, depriving the payment to about 1 million adults, who don't need to file taxes because of their income being limited to sources such as Social Security and disability payments.