Tax Break Alert: Latest IRS Update May Save You Money on 2022 Federal Tax Return!

By Johnny Johnson

Taxes are rarely fun, but the latest news from the IRS might just brighten your day! If you received a relief payment or stimulus check from your state in 2022, there’s good news: you may not have to report it on your federal tax return. Read on to find out which states qualify and what this means for taxpayers across the country.

The IRS has recently clarified that residents of certain states who received tax rebates in 2022 do not need to report those rebates as income on their federal tax return. Last year, many states distributed special relief payments to eligible residents to help them cope with rising prices and energy costs as well as expenses related to the pandemic. This has been a source of uncertainty for taxpayers across the country, but this new guidance provides clarity and relief for those in certain states.

According to the IRS, residents of the following states do not need to report their state relief payments as income: Alaska, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island. These states categorized their payments as general welfare or disaster relief payments, which are legally not taxable, just like the 2020 and 2021 federal stimulus checks.

Residents of Georgia, Massachusetts, South Carolina, and Virginia also do not need to report their state payments, which were technically refunds of state taxes paid, if they claimed the standard deduction, or if they itemized their deductions but didn’t receive a tax benefit.

This new guidance from the IRS means that taxpayers who were waiting to file can now do so. The official due date is April 18 for most people, so it’s important to get started early to avoid any last-minute stress. Filing your taxes electronically and selecting direct deposit as your delivery method can also help you receive your refund quickly.

It’s important to note that the rules and regulations surrounding taxes can be complex, and individual circumstances can vary greatly. Consulting with a tax professional or referring to the IRS website for specific guidance on your individual tax situation is always recommended.

Overall, the IRS’s new guidance provides some much-needed clarity and relief for taxpayers in certain states. If you received a state relief payment last year, be sure to check whether your state is on the list of those where the payments are not taxable. And if you were waiting to file your taxes, the time has come to get started!