Financial experts offer tips for potential $400 one-time rebate from the state
BIRMINGHAM, Ala. (WBRC) - Hundreds of dollars from the state could soon be in your wallet. Governor Kay Ivey is asking lawmakers to approve a one-time $400 rebate for Alabamians to help with rising inflation costs.
If Governor Ivey’s budget proposal makes it through the legislature, eligible adults will get a one-time rebate from the state of $400. That is up to $800 for working families. The money is coming from Alabama’s $2.7 billion tax surplus.
To qualify for the payment, you have to have filed Alabama state taxes in 2021. If approved, lawmakers said it will take two or three months to distribute the money, and it would cost the state more than $960 million to issue these payments.
Governor Ivey said in her State of the State address, she is pushing for this to give you immediate relief from inflation. Financial experts tell WBRC that the best thing to do with the extra cash is pay off your high interest debt or save it.
“There’s a number of different things that you could potentially address with this extra money, but you really want to try to address the things right in front of you first and then start thinking longer term,” Marshall Clay with The Welch Group said. “First and foremost, you want to look at that emergency cash reserve. Build that emergency cash reserve for when those events arise, not if.”
“I know a lot of people have accumulated credit card debt,” Clay said. “If you have revolving credit on a bill, that would be one of the first places I would look to allocate any extra cash.”
WBRC asked officials with the Governor’s office if the rebate will be taxed or if there will be a certain income threshold you have to meet to get the money. Officials said:
“The rebate is not taxable for Alabama income tax purposes. There is no income threshold requirement. The refund is based on the taxpayer’s filing status for the 2021 income tax return. $400 for single, head of family and married filing separate and $800 for married filing jointly.”
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