If you received a relief payment or stimulus check from your state last year, good news: you don’t need to report it on your federal tax return. Probably.
After much deliberation, the IRS has issued new direction Friday clarifying that residents of certain states who received tax refunds in 2022 do not need to report those refunds as income.
Last year, many states distributed these special relief payments to eligible residents to help them cope price increase and energy costs as well as pandemic-related expenses. The IRS had previously advised taxpayers to wait to drop off their taxes this spring until he determines whether state payments would be taxed federally.
The rules
According to the IRS, residents of the following states do not need to report their state relief payments as income. These states have classified their payments as general welfare or disaster relief payments, which, like the federal 2020 and 2021 stimulus checks — are not legally taxable.
- Alaska
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Hawaii
- Idaho
- Illinois
- Indiana
- Maine
- New Jersey
- New Mexico
- new York
- Oregon
- Pennsylvania
- Rhode Island
Residents of the following four states do not have to report their state payments, which were technically refunds of state taxes paid, if they claimed the standard deduction or if they itemized their deductions but did not receive a tax benefit.
- Georgia
- Massachusetts
- Caroline from the south
- Virginia
The IRS added that New York and Illinois issued multiple payments, one of which was also considered a state tax refund. These payments also fall under these rules. Alaska residents do not need to report additional energy assistance payments, but the annual permanent fund dividend is taxable.
money tips
Tax season has begun and these new guidelines mean that taxpayers who have been waiting to file their returns can now do so. The official due date is April 18 for most people. If you want to receive your refund quickly, it’s best to file as soon as possible, file electronically and select direct deposit as your delivery method.
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