Tax season is underway but the Internal Revenue Service is still figuring out whether taxpayers who received tax rebates last year should count them as taxable income.
IRS Advises Californians And 18 Other States Not To File Their Taxes Yet, Guidance Will be Released this Week (PHOTO: CNBC)
IRS Wants To Hold Off On Tax Filing
Most taxpayers in California including 18 other states are confused about whether the state stimulus checks released in 2022 are taxable or not. However, from CBS news there are 22 states included in the advisory.
If you’re one of the millions of taxpayers who received a one-time tax payment from your state last year, the Internal Revenue Service is advising you to Hold off on filing your federal income tax return. Even though tax season started on January 23, the IRS is still deciding whether the payments sent last year to taxpayers in almost two dozen states as a way to provide relief from soaring inflation should be treated as taxable income on their federal returns.
In a statement released on Friday, 3 February the IRS explained: “We are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers.”
What Should Taxpayers Do As Of The Moment?
IRS is well aware of questions involving special tax refunds or payments made by states in 2022. As of now, the rules involved “are complex,” as the IRS said and so is its advice. The IRS declares that people should wait to file tax returns if they’re not sure if the money they got from states is taxable at the federal level.
But at the same time, the agency suggests taxpayers who have already completed their federal tax return might not need to worry about it, stating, “We also do not suggest amending a previously filed 2022 return.” The situation is far from an idea in the middle of a stressful tax season for tax filers, and Rep. Kevin Kiley of California has reached on the IRS to offer prompt guidance. In a publically available letter, he wrote:
“As federal tax deadlines threaten, numerous constituents have contacted my office urgently asking for my assistance getting information from your agency regarding whether payments under California’s Middle-Class Tax Refund (MCTR) are considered income for federal tax purposes.”
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