Taxpayers who filed their federal income taxes early this year and reported state refunds they received in 2022 as income may want to take the time to file an amended return.
After some uncertainty about the taxability of refunds and rebates issued by certain states concerning inflation, general welfare, and disaster relief, among other issues, the IRS determined that, for most of the states affected, these payments do not have to be included in claimed income for taxpayers.
However, taxpayers must file an amended 2022 return to the back the taxes paid.
That means people in the following states don’t need to report these state payments on their 2022 tax return:
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Hawaii
- Idaho
- Illinois
- Indiana
- Maine
- New Jersey
- New Mexico
- New York
- Oregon
- Pennsylvania
- Rhode Island
Alaska is also in this group, but the determination applies only to the special supplemental Energy Relief Payment received.
Taxpayers can view a list of states and the federal tax treatment of their special state refunds or rebates on this chart.
Specific requirements may need to be met, depending on your state.
Give me a call.
If you aren’t sure if you meet the requirements or simply need a financial check-in, give C&B a call. We’ll let you know if you’re due some “cash back!”
