The IRS or the Internal Revenue System recently issued guidance about how the department would be handling the state stimulus payments. The payments would be coming in a week from the date of writing, and this information does provide one with an inkling as to how one should proceed with the filing of the payments as tax.
The IRS went on to put out an alert where they advised millions of taxpayers to start delaying their tax returns until they had put out an additional clarification- which they have done now. In a statement that was issued on Friday, the IRS stated that most of the relief checks that had been issued by the states the previous year were not subject to federal taxes. In a statement, the agency mentioned that the IRS had determined that in their quest for sound tax administration, the taxpayers will not have to report these payments.
Stimulus Check Payment To Not Be Taxable In 17 States
On the whole, taxpayers in 17 different states will not have to report on the stimulus check payments that they received the previous year. In another four states, most of the people would be able to avoid paying their federal taxes if they ended up meeting certain requirements. This clarification comes about a week after the primary notice, and it will definitely ease the citizens up a bit.
As it stands, none of the general welfare or the disaster relief stimulus check payments would have to be reported by taxpayers in close to 17 states in the country which are Alaska, Colorado, California, Delaware, Connecticut, Florida, Idaho, Hawaii, Illinois, Maine, Indiana, New Mexico, New Jersey, Oregon, New York, Pennsylvania, and Rhode Island.
The agency further stated that if a taxpayer didn’t include the amount of one single stimulus check payment in the income of 2022 for federal tax purposes, the IRS will not be challenging this treatment of such payment as they would be excludable for income on an amended or original return.