A week after telling payment recipients to delay filing returns, the IRS said it won’t challenge the taxability of payments related to general welfare and disaster. This means that taxpayers who received those checks won’t have to pay federal taxes on those payments.
The IRS has announced that taxpayers in certain states will not have to report the relief checks they receive as income. The states where checks will not be reported are California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. Thank you for your patience as the IRS and Treasury worked to resolve this unique and complex situation.
As if the annual Permanent Fund Dividend wasn’t enough, Alaskan taxpayers learned this week that they may also be eligible for energy relief payments. According to the IRS, many taxpayers in Georgia, Massachusetts, South Carolina and Virginia are able to avoid federal taxes on state payments if they meet certain requirements.
In California, most residents received a “middle class tax refund” last year, a payment of up to $1,050 depending on their income, filing status and whether they had children.