The Internal Revenue Service (IRS) will issue its official decision on whether California’s Middle Class Tax Refund is taxable.
IRS will release official statement next week on whether Middle Class Tax Refund is taxable. (Photo: Mint)
IRS Will Issue Statement on California’s Middle Class Tax Refund
California’s Franchise Tax Board (FTB) released $9 billion in direct payments to more than 31 million taxpayers and their dependents last month. But many of the recipients are now asking the Internal Revenue Service whether the payment is taxable.
In a published article in KCRA, the IRS said that the agency will release its official decision next week on whether the Middle Class Tax Refund should be considered as income for federal tax purposes. This is after the recipients wrote a letter to the office of U.S. Rep. Kevin Kiley.
IRS Responded to the Letter
Rep. Kiley wrote a letter addressed to the IRS Commissioner Doug O’Donnell and stated, “As federal tax deadlines loom, numerous constituents have contacted my office urgently asking for help getting information from your agency regarding whether payments under California’s Middle Class Tax Refund (MCTR) are considered income for federal tax purposes.”
Meanwhile, the IRS responded and said, “The IRS is aware of questions involving special tax refunds or payments made by states in 2022; we are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers. There are a variety of state programs that distributed these payments in 2022 and the rules surrounding them are complex. We expect to provide additional clarity for as many states and taxpayers as possible next week.”
Furthermore, the agency added that Californians should week until next week for guidance or consult with a reputable tax professional regarding the clarification over the Middle Class Tax Refund, according to a report published in ABC7.
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