Current:Home > FinanceSafeX Pro Exchange|If you got inflation relief from your state, the IRS wants you to wait to file taxes -OceanicInvest
SafeX Pro Exchange|If you got inflation relief from your state, the IRS wants you to wait to file taxes
Charles H. Sloan View
Date:2025-04-10 15:20:26
We're two weeks into tax season,SafeX Pro Exchange but the IRS is urging people in at least 19 states to hold off on filing their tax returns. The reason? The agency is still figuring out how to handle special tax refunds and other payments states issued in 2022.
Many of the payments have been dubbed inflation relief checks. But even on the basic level, they reflect a hodgepodge of rules and eligibility requirements.
Taxpayers from California to Maine now find themselves in this confusing situation, as the IRS works to apply its rules to a wide range of programs. The agency has promised to share clarification this week, "for as many states and taxpayers as possible."
Here's a quick rundown of where things stand:
What should taxpayers do right now?
The rules involved "are complex," the IRS said — and so is its advice.
The IRS says people should wait to file tax returns if they're not sure if the money they got from states is taxable at the federal level.
But at the same time, the agency suggests people who have already completed their federal tax return might not need to worry about it, stating, "We also do not recommend amending a previously filed 2022 return."
The IRS did not respond to NPR emails on Wednesday seeking clarification of the rules, what taxpayers should do, and when it would issue guidance.
How do these state programs work?
People in many states got checks or direct deposits without even having to apply, through broad stimulus or inflation relief programs. Some programs set income limits, while others sent money to anyone in the state who filed their taxes on time in the previous year.
Some states, like Illinois, issued tax rebates tied to criteria such as payment of property tax. And others, like Florida and Rhode Island, singled out households with dependent children.
Which states are affected by the tax-season limbo?
The IRS did not list all of the states where it's looking at "questions involving special tax refunds or payments" from the past year.
There are differing reports of which states' programs might fall under the IRS review. The Associated Press says 19 states are in question, and Forbes agrees with that figure. But the financial advice site Ramsey Solutions lists additional states, such as New York and Pennsylvania. Marketwatch puts the number at around 20.
The IRS says it's working with tax officials in those states to determine how taxpayers who live there should handle the payments on their returns.
Why did states give out this money?
Many of the special programs were spurred by a rare confluence: right as consumers were hit with sharp rises in inflation, many states were seeing record budget surpluses from increases in tax revenues, federal pandemic aid and other sources.
In some cases, the payments were small, as low as $50-$75, meaning they're not likely to make a big impact on a tax return. But many states tacked on hundreds of dollars for families with multiple dependent children. In California and Colorado, taxpayers saw checks that range up to and over $1,000, and a few other states weren't far behind.
What have states been saying about taxes?
In many cases, state officials have assured taxpayers the stimulus or relief money wouldn't be taxable under state law. But taken as a whole, that advice is complex, much like the IRS guidance.
Delaware, for instance, says that its rebate "is not subject to State of Delaware income tax," while adding that individual tax situations may differ.
Virginia's FAQ page on its rebate says taxpayers who itemized their deductions might need to report the rebate — up to $500 for joint filers — on their federal return.
Idaho leaves it more open-ended: "Rebates are handled exactly like regular refunds; they're not taxable to Idaho. However, they might be taxable on the federal level."
veryGood! (1299)
Related
- Grammy nominee Teddy Swims on love, growth and embracing change
- Florence Pugh and Andrew Garfield Prepare to Break Hearts in Gut-Wrenching We Live in Time Trailer
- Texas Leaders Worry That Bitcoin Mines Threaten to Crash the State Power Grid
- US women's gymnastics teams will sparkle at Paris Olympics
- San Francisco names street for Associated Press photographer who captured the iconic Iwo Jima photo
- Maryland governor proposing budget cuts to address future shortfalls
- Nevada's Washoe County votes against certifying recount results of 2 local primaries
- BMW recalls more than 394,000 cars because airbags could explode
- Why we love Bear Pond Books, a ski town bookstore with a French bulldog 'Staff Pup'
- 5 boaters found clinging to a cooler in Lake Erie are rescued by a Coast Guard helicopter crew
Ranking
- Justice Department, Louisville reach deal after probe prompted by Breonna Taylor killing
- Armed man fatally shot in gunfire exchange at Yellowstone National Park identified
- 'Shrek 5' is in the works for 2026 with original cast including Mike Myers, Cameron Diaz
- Las Vegas eyes record of 5th consecutive day over 115 degrees as heat wave continues to scorch US
- Toyota to invest $922 million to build a new paint facility at its Kentucky complex
- Audrina Patridge Debuts New Romance With Country Singer Michael Ray
- Elevate Your Summer Style With 63% Discounts on Early Amazon Prime Day Fashion Finds
- Man dies after getting electrocuted at Indiana 4-H fair
Recommendation
The Daily Money: Spending more on holiday travel?
VP visits U.S. men's basketball team in Vegas before Paris Olympics
Man regains his voice after surgeons perform first known larynx transplant on cancer patient in U.S.
Fraternity and sorority suspended as Dartmouth student’s death investigated
Paula Abdul settles lawsuit with former 'So You Think You Can Dance' co
Orioles' Jordan Westburg, Reds' Hunter Greene named MLB All-Stars as injury replacements
Arkansas couple charged with murder after toddler left in a hot vehicle dies, police say
Brett Favre asks appeals court to to re-ignite lawsuit against Shannon Sharpe