The IRS on Friday released federal tax guidance for the millions of Americans who received government deductions or payments in 2022.
The announcement came about a week after the agency urged those taxpayers to delay filing while it determines whether the money is taxable on federal returns.
“The IRS has determined that in the interest of proper tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns,” the agency 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 need to report these payments. Federal tax returns. Some Alaska taxpayers may also avoid federal charges on certain payments.
Taxpayers in Georgia, Massachusetts, South Carolina and Virginia may also skip federal tax reporting for some payments. But eligibility may depend on factors from previous tax returns.
“This is the right judgment by the IRS,” said Adam Markowitz, registered agent and vice president at Luminary Tax Advisors in Windermere, Florida. “It’s not fair to punish taxpayers so late in the game if they’re going to change anything.”
However, he said there may be challenges for California taxpayers because the state has already issued them 1099-MISC forms, which report the state’s “middle-class tax refund” as a taxable payment to the IRS.
More than 16.5 million California taxpayers have received the payment, according to the state’s Franchise Tax Board.
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