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IRS Clarifies Which 2022 State Tax Payments Are Non-Taxable
Many states issued special tax rebates or other relief payments in 2022 and until recently, it has been unclear whether recipients of these payments had to report them as taxable income on their 2022 federal tax returns.
According to the IRS, certain payments issued by 17 state governments may qualify as disaster relief or general welfare payments, which taxpayers may exclude from their income. Therefore, those who received these special rebates or relief payments generally do not have to report the payments on their federal tax returns as taxable income. The 17 states are: Alaska, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. The IRS has published a list of the specific payments covered by this rule.
Meanwhile, taxpayers in Georgia, Massachusetts, South Carolina and Virginia who received certain state tax payments in 2022 may be able to exclude these payments from their income if they were a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit.
A tax professional can help you determine whether any state tax payments you received in 2022 may be taxable, and if so, how to properly report them on your tax return.
List of State Tax Payments Covered: https://www.irs.gov/newsroom/state-payments
About Chad Brzezinski, CPA, PLLC
Chad Brzezinski, CPA, PLLC is a Certified Public Accounting Firm providing accounting, tax, and other advisory services to businesses and individuals. The Firm’s expertise ranges from basic tax management and accounting services to more in-depth services such as financial statements. Combining expertise with one-on-one professional relationships, the Firm assures that every client receives the close analysis and attention they deserve.
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