'I would hope and imagine that the IRS within the next month would come out with some ruling,' said one IRS enrolled agent.
Millions received payments ranging from $200 per person to $1,050 for families, but now the feds may take a bite.Yes, the IRS is still deciding whether or not you must pay taxes on your relief payment."I would hope and imagine that the IRS within the next month would come out with some ruling," said Golden. Golden says if the IRS believes the payments were meant for economic relief, they'd qualify for a tax break.
"It has to be for the promotion of general welfare. It was at a time when it was going to counteract inflation, higher gas prices, which is part of inflation. So there's a very good argument that it would qualify," said Golden.Golden says the IRS may be reluctant to let go of potentially huge tax revenues. California spent more than $9 billion on relief payments.
If you got a $700 payment, for example, and you're in a 25% tax bracket, you would have to pay $175 of your payment to the IRS. Golden says to report the income, but then ask to back it out -- citing the so-called "general welfare" exclusion. If you're denied, he says, be happy you get to keep the rest of the money.
"Sometimes you just hate to say it, but throw in the towel and just say, 'Well, that's how it is,'" said Golden.taxes. Also, if your inflation relief payment was less than $600, you won't get a 1099 and there is no need to report it.7OYS's consumer hotline is a free consumer mediation service for those in the San Francisco Bay Area.
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