Taxpayers who included the state relief checks in their federal income tax before the IRS guidance are now asking about what to do.
Here’s what to do if you included state relief checks in your federal income tax before the IRS guidance. (Photo: The U.S. Sun)
State Relief Checks Filed Before IRS Guidance
The Internal Revenue Service (IRS) began the tax season on Jan.23 and it will end on April 18. Millions of taxpayers across the country include state relief checks in their federal income tax. However, the revenue agency released recently new guidance that excludes these payments in the taxable income.
In a published article in FOX 2 NOW, Adam Brewer, a tax attorney, said, “My advice would be don’t do anything drastic just yet. Wait to see if the IRS provides some guidance here because we’ve really kind of been chasing our tail on this whole issue.”
He said this after millions of taxpayers asked about what to do since they included the state relief checks in their federal income tax before the IRS guidance was released. Moreover, the revenue agency did not yet release any statements regarding this matter.
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What to do if Taxpayers Included the State Relief Checks Before the IRS Guidance?
Brewer explained, “First [we’re] telling people that well, because there’s a 1099 Miscellaneous issued it’s taxable, and then the IRS comes back, you know, a month later and says actually, we’re not going to treat it as taxable. So I think the last thing we want to do right now is have people go through the extra trouble of filing amended returns when the IRS could very well issue a new policy that says they’re going to make the adjustments on their side.”
According to an article published in Consumer Financial Protection Bureau, the IRS made the corrections for the taxpayers in 2021 when the American Rescue Plan Act changed the rule over unemployment benefits. Instead of asking them to refile, the revenue did the changes.
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