IRS Statement Regarding Payment of Special Tax Refunds by States

February 4, 2023 by 1 Comment
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After the post by Bob Kamman, the IRS released a statement yesterday regarding these payments:

February 3 update

IRS issues statement about the taxability of state payments

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.

For taxpayers uncertain about the taxability of their state payments, the IRS recommends they wait until additional guidance is available or consult with a reputable tax professional. For taxpayers and tax preparers with questions, the best course of action is to wait for additional clarification on state payments rather than calling the IRS. We also do not recommend amending a previously filed 2022 return.

Filed Under: miscellaneous

Comments

  1. Norman Diamond says
    February 4, 2023 at 10:55 am

    IRS says: “For taxpayers uncertain about the taxability of their state payments, the IRS recommends they wait until additional guidance is available or consult with a reputable tax professional.”

    Or consult with a reputable tax professional? And what should a reputable tax professional do? IRS answered that too: “For taxpayers and tax preparers with questions, the best course of action is to wait for additional clarification on state payments rather than calling the IRS.”

    The people affected by this are people who depend on EITC etc. Sure just wait, you can eat next month instead of this month.

    Reply

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