In a news release issued Friday, the IRS announced that it is aware of questions involving special tax refunds or payments made by states in 2022 and they are currently working with state tax officials to address whether these payments are subject to federal tax.
Specifically, the IRS stated, “For taxpayers uncertain about the taxability of their state payments, the IRS recommends they wait until additional guidance is available or consult with a reputable tax professional. For taxpayers and tax preparers with questions, the best course of action is to wait for additional clarification on state payments rather than calling the IRS. We also do not recommend amending a previously filed 2022 return.”
Subscribe to Spidell’s California Taxletter and stay ahead of California tax changes so they don’t take you by surprise. Click here for more information and to download a sample issue.