The IRS has determined whether state-issued rebate payments will count as taxable income for the 2022 tax season after telling taxpayers to delay filing.
House Budget Committee member Rep. Buddy Carter, R-Ga., discusses his Fair Tax Act and responds to Biden claiming Republicans want to end Social Security and Medicare on 'The Big Money Show.'whether relief checks issued by some states last year are going to be taxed, doing so right as Americans have begun to file their 2022 taxes.
In a statement last week, the IRS cautioned taxpayers to delay filing their returns as the agency considered whether taxpayersissued by 21 states in 2022. Now, the IRS has concluded that most will not need to pay taxes on those payments for general welfare and disaster relief after all. "The IRS appreciates the patience of taxpayers, tax professionals, software companies and state tax administrators as the IRS and Treasury worked to resolve this unique and complex situation," the agency said Friday.The word"taxes" is seen engraved at the headquarters of the Internal Revenue Service in Washington, D.C., May 10, 2021.
In addition, many taxpayers in Georgia, Massachusetts, South Carolina and Virginia also avoid federal taxes on state payments "if the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit."