If you live in these 19 states, don’t file taxes yet: IRS
(NewsNation) — People who live in one of the 19 states that issued special tax refunds or payments last year should wait to file their 2022 taxes, the IRS says.
In a statement, the agency said it is working with state tax officials “as quickly as possible” to provide additional information on this matter.
“There are a variety of state programs that distributed these payments in 2022 and the rules surrounding them are complex,” the IRS said. “We expect to provide additional clarity for as many states and taxpayers as possible next week.”
While certain states that provided these refunds have determined the payments are not taxable for most, what now needs to be determined is whether they can be taxed on a federal level, Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals, told the Associated Press.
Special tax refunds were offered by these 19 states:
- Alaska
- California
- Colorado
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Maine
- Massachusetts
- Minnesota
- New Jersey
- New Mexico
- Oregon
- Rhode Island
- South Carolina
- Virginia
The IRS advises that taxpayers unsure about the taxability of their state payments talk to a reputable tax professional.
“While this is unusual, this kind of determination in the middle of tax season isn’t unprecedented,” tax attorney Adam Brewer of AB Tax Law told Nexstar, NewsNation’s parent company. “In 2021, the IRS exempted the first $10,200 of unemployment benefits received in 2020 after many taxpayers had already filed their income taxes and reported the income as taxable. This mid-tax season rule change may be following that precedent.”
This year’s tax deadline is April 18, though some living overseas, as well as disaster victims, might have later filing deadlines. The IRS is giving Alabama, California and Georgia storm victims until May 15 to file “various federal individual and business tax returns and make tax payments.”
But what if you’ve already sent in your return?
Ryan Ellis, president of the Center for a Free Economy, says: nothing.
“Don’t feel like you have to do any sort of corrections. Wait until you know if the IRS has a problem,” Ellis said.
If they think someone should have paid taxes on the state relief checks, Ellis said, “They’ll send you a letter, and they’ll say, ‘Well, pay an extra couple $100 in taxes, and you should have included it on your return.”
There’s a very good chance that you’ll never get that letter, though.
“The IRS may also take it out of an anticipated refund that you have coming,” Ellis said.
Whether you’ve already filed your taxes or not, Ellis said, “It’s incredibly disruptive to go into a tax season and for the IRS to say, ‘Whoa, whoa, whoa, hold on, we got one more thing we forgot to do.'”
“That really puts a halting motion on everything,” Ellis said.
The Associated Press and Nexstar Media Wire contributed to this report.