About 23 million California residents to receive ‘inflation relief’ payments

Yahoo Finance reporter Dani Romero explains how millions of California residents will receive tax rebates due to the effects of inflation and record-high gas prices on the state.

Video Transcript

- Have we seen the worst of the pain at the pump? Gas prices have at least flattened in recent days, averaging $4.90 a gallon nationally today. But in California, still $6.32 a gallon. Dani Romero here with some good news for Golden State drivers. And they are in desperate need of some good news. This is pretty big, the rebate.

DANI ROMERO: Yeah, I mean, I think everybody is in desperate need. Pain at the pump is real right now. But yes, it'll be payday for 23 million Californians that expect some cash from the state to help with inflation and also those high gas prices. But like you said, this is really good news for Californians who pay the highest in gas prices, this $17 billion relief package. It will include direct payments of up to $1,050. And the payments will be issued either through a direct deposit or debit cards. And the other thing is it'll come by late October. Now, that's according to Governor Newsom's office. Now, that could change. Taxpayers are expecting payments of $250, $350, or $200 based on their income salary.

So let's break this down. So those who make less than $75,000 would get $350, while those with a joint income of under $150,000 would get $700, plus an additional $350 per dependent. Now, if you now if you make between $75,000 and $125,000, then you get $250, while joint income of $150,000 to $250,000 would get $500 plus an additional $250 per dependent. However, the deal does not suspend the state's gas tax, which is set to start in July, which is $0.03. It would go up $0.03. But beginning October 1, they will suspend the diesel sales tax, which is up $0.23 per gallon. So overall, relief is really on the way for these Californians.

- And the cap is $1,050, right? I think the total ceiling?


- And then something else to keep an eye on, gas stations reportedly putting some large holds on credit card swipes. Usually it's about $1. What's the latest there?

DANI ROMERO: Yeah, well consumers are definitely feeling the squeeze. And now, gas stations are putting a $175 hold on debit cards and credit cards. I reached out to the association called Convenience and Fueling Retail, a trade association. And they told me that-- they were saying that the higher limit is really reflecting the higher gas prices. And the hold is supposed to replicate the amount that someone would actually use in a single transaction. , Obviously gas prices have gone up so that number went up.

And debit cards actually do have a hold on gas prices. They are required by credit card companies. If not, they really do run the risk of not getting paid. But now, the rules regarding how much that hold will be really is dependent on the bank and also the gas station themselves. And also, the amount of time should be just a few days, that hold. But the downside will be that this hold could trigger that overdraft fees. So experts really say to check your balance before you head to the pump. Also to pay an advance at the register.

- Yeah, certainly, that is one way to avoid it. But certainly very concerning here for so many Americans who don't have the extra income right now facing higher prices in almost every aspect of their lives. And now, they're seeing some holds being placed on credit cards. So very serious stuff. Dani Romero, thanks so much for joining us this afternoon.