irs on friday released federal tax guidance For millions of Americans receiving state exemptions or payments in 2022.
The announcement came about a week after the agency urged those taxpayers stop filing While it is determined whether the funds are taxable on the federal return.
“The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not be required to report these payments on their 2022 tax returns,” the agency said. said in a statement,
The agency said taxpayers in California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island will not be required to report. this payment on their federal tax return. Some Alaska taxpayers can also avoid the federal levy on certain payments.
Taxpayers in Georgia, Massachusetts, South Carolina and Virginia can also skip federal tax reporting for certain payments. But eligibility may depend on factors from your previous tax filings.
“This is the right decision by the IRS,” said Adam Markowitz, enrolled agent and vice president at Luminary Tax Advisors in Windermere, Florida. “It’s unfair to penalize taxpayers late in the game if they were going to change anything.”
However, he said there could be challenges for California taxpayers because the state has already issued them 1099-MISC forms that reported the state’s “middle class tax refund” as a taxable payment to the IRS. .
More than 16.5 million California taxpayers have received payments, according to the state franchise tax board,
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