IRS Releases New Guidance

IRS Says Don't File Taxes ... Yet

( – In 2022, almost two dozen states handed out stimulus-like payments to citizens to help them deal with rising inflation. That has caused a problem this tax season. After weeks of uncertainty, the IRS has finally released new guidance for taxpayers in states that gave out aid to residents.

On February 3, the federal agency issued a statement asking residents in states that handed out rebates to delay filing taxes. According to the IRS, there were questions surrounding the special tax refunds and said they were working with states to provide guidance for taxpayers on how to handle those payments on their filing. The agency also recommended taxpayers avoid calling the agency and just wait for clarification. Additionally, it doesn’t recommend those who have already filed their 2022 returns to try to amend them.

Just a week later, on February 10, the IRS issued the new guidance for the 21 states that were impacted. The federal agency determined taxpayers in many of the states would not have to pay federal taxes on the money they received that was deemed welfare and disaster relief.

Residents in Massachusetts, South Carolina, Georgia, and Virginia will not have to pay taxes on the money if the payment was a state tax refund and the recipient either itemized their deductions but didn’t receive a tax benefit or claimed the standard deduction.

The residents of the following states will not have to pay taxes on the aid: Connecticut, California, Colorado, Florida, Delaware, Hawaii, Illinois, Idaho, Indiana, New Jersey, Maine, New York, New Mexico, Pennsylvania, Oregon, Alaska, and Rhode Island.

Residents of the states mentioned can now file their tax returns since the guidance came out. The deadline to file your 2022 taxes this year is Tuesday, April 18. The date was moved because April 15 is a Saturday, and April 17 is Emancipation Day, the federal holiday recognizing Lincoln’s emancipation of people from slavery in the US in 1862.

Copyright 2023,