The IRS issues a state rebate guideline for taxpayers being asked to defer filing

The IRS on Friday published federal tax guidelines for millions of Americans who received government rebates or payments in 2022.

The announcement came about a week after the agency asked those taxpayers to delay filing while it determined whether the funds would be taxable on federal tax returns.

“The IRS has determined that taxpayers in many states are not required to report these payments on their 2022 tax returns for the sake of sound tax administration and other factors,” the agency said said in a statement.

The agency said taxpayers in California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island are not required to report these payments on their federal tax returns. Some Alaska taxpayers may also avoid federal taxes on certain payments.

Taxpayers in Georgia, Massachusetts, South Carolina, and Virginia can also skip federal tax reporting for some payments. However, eligibility may depend on factors from your previous tax returns.

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“The State of California really did everyone a disservice by issuing 1099-MISC [forms]said Dan Herron, a San Luis Obispo, California-based certified financial planner at Elemental Wealth Advisors. He is also a certified public accountant.

If the state doesn’t amend those forms and reissue them to the IRS, it could create a discrepancy when California taxpayers file their federal returns, he said.

Typically, a discrepancy between tax forms and tax returns triggers automated alerts that can delay refunds or require taxpayers to contact the IRS for resolution.

“I don’t know how the IRS system is going to handle this,” Herron added. The IRS issues a state rebate guideline for taxpayers being asked to defer filing

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