The IRS has announced very relieving news to the citizens of the United States of America. Taxpayers all over the US received the good news on Friday that the central taxation status has made a special consideration in relation to the stimulus check given by 21 states throughout 2022.
Payments made as stimulus check, relief payment, or tax refund under various schemes to support the residents during a time of inflation is not taxable income. These US states made these payments to help people combat the rising prices of basic goods including food, medicines, and gas.
IRS Taxable Stimulus Check
IRS made a complex yet unique tax situation regarding the stimulus check since they requested taxpayers to hold off their tax filing process for 2022. The agency is yet to decide whether it will make the stimulus payment a taxable income or not. They have reviewed the situation and informed us that they would not challenge the standard taxable deduction status for the special state stimulus payments.
Several US states offered stimulus payments including Rhode Island, Oregon, Pennsylvania, New Mexico, Main, New York, New Jersey, Illinois, Idaho, Maine, Florida, Delaware, Hawaii, Colorado, Connecticut, California, and Delaware. Residents of these 16 states who received relief payments do not need to report it because it is not taxable.
Relief Payments Are Not Taxable
IRS has made special consideration for Alaska to make their stimulus check non-taxable since they are experiencing the worst inflation. However, residents of Virginia, Georgia, South Carolina, and Massachusetts will be taxed normally on their stimulus check amount.
IRS has stated that the previous declaration of a pandemic emergency will conclude in May 2023. As a result, the agency will allow special taxation consideration for the tax filing of 2022.