The New York State government recently made a historic announcement. The New York Department of Taxation and Finance confirmed that it will be sending the state’s first “Dearness Refund” checks. This plan is designed to provide some relief to citizens struggling with the pressure of rising inflation and the associated high sales tax. The plan was announced by New York Governor Kathy Hoche in May 2025, and the checks will begin reaching eligible citizens by the end of September.
Who is eligible for a Dearness Refund Check?
Eligibility for this refund plan is based on the 2023 tax year. Your eligibility will be determined by your 2023 tax filing form and your income for that year.
The main eligibility criteria are:
- Those who are New York State residents and filed a tax return using Form IT-201.
- Those whose income is within certain limits.
- Those who are not listed as a “Dependent” on another person’s return.
Eligible individuals will receive a refund ranging from $150 to $400. The actual amount will depend on your filing status (Single or Joint Filing) and your 2023 Adjusted Gross Income (AGI).
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Is it necessary to apply?
The most convenient aspect of this plan is that it requires no separate application or registration. The Tax Department will review your 2023 tax filing to determine your eligibility and send the check directly to your address.
The Tax Department says these payments will be sent in phases over different weeks. This means your check may arrive before or after your neighbor’s. This process will be completely random, not based on region or zip code.
Why is New York State sending this refund?
According to Jared Walczak, vice president of the Tax Foundation, inflation directly increases state government revenue in New York. Sales tax collections also increase as prices of goods and services rise due to inflation.
The government now wants to return this additional revenue to citizens to provide some relief to those affected by inflation. This is why it’s being called an “inflation refund.”
Experts say that state and federal governments sometimes issue refunds or stimulus checks to taxpayers under special circumstances. But currently, New York is the only state that has announced a directly inflation-linked payment.
Situation in Other States
In the summer of 2025, U.S. Senator Josh Hawley proposed the American Workers Rebate Act. This proposal would send tariff rebate checks to American families. The plan called for a minimum payment of $600 for each adult and dependent child, and $2,400 for a family of four. However, this bill has not yet been passed and is pending consideration in the Finance Committee.
According to Jared Walczak, no other state has yet announced a special inflation-linked payment plan like New York’s.
How much money will you receive?
If you are eligible, you will receive a check ranging from $150 to $400.
- Single filers with relatively low incomes will typically receive payments of $150–$200.
- Joint filers or families with higher incomes can receive payments of up to $400.
The amount will be based solely on your 2023 Adjusted Gross Income (AGI) and your filing status.
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How to use this money correctly?
Financial experts say that although this amount isn’t very large, using it wisely can prove beneficial in the future.
- Build an emergency fund: According to financial planner Douglas Bonaparte, use this money first to strengthen your emergency fund. This will prevent the need to borrow for unexpected expenses.
- Pay off debt: If you have high-interest debt, such as a credit card balance, use this money to pay it off. This will reduce the interest burden.
- Invest for the future: Once you’ve settled your emergency fund and debt, investing this amount can strengthen your financial position in the long run.
A Smart Financial Move
This is not a substantial stimulus of 400 dollars but it is relief to millions of New Yorkers. With this extra cash in hand, individuals will be able to reduce the forces of inflation and will be in a great position to build up their financial future.
Not only will this government initiative assist with budget planning, but it is also a good move towards being financially stable.
In such a way, New York State inflation refund plan has turned into a relief of citizens. This check may be delivered to your door starting in September of 2025 should you have filed your taxes in 2023 and are eligible. It would be helpful in the long-run to use it wisely.
FAQs
Q1. What is the $400 Inflation Refund?
It is a one-time payment from New York State to help residents cope with rising inflation and higher sales taxes.
Q2. Who is eligible for the refund?
Residents who filed a 2023 New York State tax return using Form IT-201, have income within certain limits, and are not claimed as dependents on someone else’s return.
Q3. Do I need to apply for this refund?
No application is needed. The state will automatically determine eligibility from your 2023 tax records and mail the check to your address.
Q4. How much money will I receive?
Eligible residents will receive between $150 and $400, depending on filing status and 2023 Adjusted Gross Income (AGI).
Q5. How should I use this money wisely?
Experts suggest using it to build an emergency fund, pay down high-interest debt, or invest for future financial stability.
