IRS issues tax guidance on 2022 State Stimulus payments
There were 21 states that had a state stimulus payments in 2022. Some States, Like California, even issued out a 1099 MISC as “other income”. This triggerred the burining question whether or not the payments were taxable on the Federal level, thus being claimed on your tax filings.
The IRS issued the guidance on February 10, 2023 on State payments that helped taxpayers in 2022. In short, the answer is the IRS will not challenge the taxability of payments releated to general welfare & dissaster relief. That basically means you do not to report the state payemtns, even if the State issued a 1099 Misc Tax Form.
There are 4 states that have certain requirements: Georgia, Massachusetts, South Carolina and Virginia will not include the state stimulus payments on their 1040. The requirements are as follow: the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit.
The other states: Alaska, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island the state payments do not need to report the paymetns on the 1040.
The guidance was released just in time of Super bowl sunday, as the residents of the state payments were advised to hold the tax iflings until guidance was issued prior to IRS guidance.
What happens if you filed your tax return already claiming the state stimulus payments? You can file an amended tax return with the IRS, excluding the state stimulus payment on the originally filed tax return.
Below are the listed states & the State Payment program in 2022.
Alaska
Energy Relief Payment (supplementing the Permanent Fund Dividend): Permanent Fund Dividend | Alaska Department of Revenue
California
Middle Class Tax Refund: Middle Class Tax Refund | California Franchise Tax Board
Colorado
Colorado Cash Back: TABOR Refund Mechanism For FY 2021-22 Only | Colorado General Assembly
Connecticut
Child Tax Rebate: 2022 Child Tax Rebate (ct.gov)
Delaware
Relief Rebate Program: 2022 Delaware Relief Rebate Program | Department of Finance (delaware.gov)
Florida
Pandemic Temporary Assistance to Needy Families: Hope Florida – A Pathway to Prosperity | Florida Department of Children and Families
Hawaii
Act 115 Refund: Act 115 Refund | Hawaii Department of Taxation
Idaho
2022 Tax Rebate: 2022 Tax Rebates: Frequently Asked Questions | State Tax Commission (idaho.gov)
Illinois
Individual Tax Rebate: 2022 State of Illinois Tax Rebates | Illinois Department of Revenue
Property Tax Rebate: 2022 State of Illinois Tax Rebates | Illinois Department of Revenue
Indiana
Automatic Refund #1, Automatic Refund #2: Automatic Taxpayer Refund | Indiana Department of Revenue
Maine
Pandemic Relief Payments: 2022 Relief Checks | Maine Revenue Services
New Jersey
ITIN Holders Director Assistance Program: ITIN Holders Direct Assistance Program | New Jersey Division of Taxation
New Mexico
Multiple rebate and relief programs: New Mexico Families Eligible for Household Relief : Taxation and Revenue New Mexico
New York
Supplemental Child Credit & E.I.C Tax Credit: Additional New York State child and earned income tax payments (ny.gov)
Oregon
1 time Assistance Payments One Time Assistance Payments | Oregon Department of Revenue
Pennsylvania
1 Time Bonus Rebates: One-Time Bonus Property Tax/Rent Rebates | Pennsylvania Department of Revenue
Rhode Island
Child Tax Rebates of 2022: 2022 Child Tax Rebates | Rhode Island Division of Taxation
