IRS issues state rebate guidance for taxpayers urged to delay filing
tax office on Friday issued a guide to federal taxes for the millions of Americans who received government rebates or payments in 2022.
The announcement comes about a week after the agency urged those taxpayers to delay filing until it determines whether the funds are taxable on federal returns.
“The IRS has determined that, in the interests of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns,” the agency said in a statement. said in a statement.
The agency said taxpayers in California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island will not need to report. these payments on their federal tax returns. Some Alaska taxpayers may also avoid paying federal fees on certain payments.
Taxpayers in Georgia, Massachusetts, South Carolina, and Virginia can also skip federal tax reporting on some payments. But eligibility may depend on factors from your previous tax returns.
Californians may still face filing challenges
“This is the right decision for the IRS,” said Adam Markowitz, registered agent and vice president of Luminary Tax Advisors in Windermere, Florida. “It’s unfair to penalize taxpayers so late if they were going to change something.”
However, he said California taxpayers could be in trouble because the state had already issued them Forms 1099-MISC for payments over $600, which reported the state’s “middle-class tax refund” as a taxable payment in IRS.
More than 16.5 million California taxpayers have received the payment, according to the state. Franchise tax advice. In total, more than 31.6 million residents received benefits, including taxpayers and their dependents.
“The State of California has really done everyone a disservice by issuing 1099-MISC. [forms]said Dan Herron, Certified Financial Planner at Elemental Wealth Advisors in San Luis Obispo, California. He is also a certified public accountant.
Unless the state changes and reissues these forms with the IRS, it could lead to inconsistencies when California taxpayers file their federal returns, he said.
Typically, discrepancies between tax forms and returns result in automatic notifications that may delay refunds or require taxpayers to contact the IRS to resolve the issue.
“I don’t know how the IRS system will handle this,” Herron added.
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