Friday, March 24, 2023

Did you receive state payment? The IRS Asks You To Wait To File Your Taxes

NEW YORK — The IRS is advising taxpayers to wait to file their tax returns for 2022 if they received a refund or special tax payment from their state last year.

Last year, 19 states — including New York, California, Florida and Illinois — introduced various programs that offered inflation relief payments or taxpayer refunds. The IRS issued guidance Friday because of the agency’s uncertainty about the taxability of the payments.

“We are working with state tax authorities as quickly as possible to provide additional information and clarity to taxpayers,” the IRS said in its statement.

For residents of these states, the agency recommends that they postpone filing their tax returns until further instructions from the IRS.

If you received a state tax refund last year, here’s what you need to know:

Which states offered excise tax refund in 2022?

A total of 19 states offer excise tax exemption in 2022. This list includes Alaska, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, Minnesota, New Jersey, New Mexico, Oregon, Rhode. Island, South Carolina and Virginia.

I got a tax refund from my state, what does the IRS notice mean for me?

If you received a tax refund from your state in 2022, the IRS recommends that you postpone filing your tax return until further instructions from the agency.

Some states that provide these refunds have determined that these payments are not taxable to most people. Tom O’Sabben, director of tax materials and government relations for the National Association of Tax Professionals, said it needs to determine whether these refunds are taxable at the federal level.

Keith Hall, president and CEO of the National Association of the Self-Employed, said that in some states, if people receive a tax refund in 2022, they will pay taxes only if they itemize their deductions.

An example of a state going this route is Virginia, which has announced that taxpayers who file the standard deduction will not owe back taxes on their tax refunds. However, not all states have issued guidance on tax refunds.

Why do I have to wait to file my return?

Hall said it’s important to follow IRS recommendations if taxpayers want to avoid amending previously filed tax returns.

“I think the IRS is trying to help people save another return if they had to file an amended return,” he said.

I have received my refund and have already filed my taxes, what do I do?

The IRS recommends that you do not file an amended return yet.

If you feel you need to file an amended return, the IRS advises you to wait until further instructions are given.

What if I’m not sure this applies to me?

If you’re not sure whether you need to wait to file your taxes, Hall recommends consulting with a tax professional about your specific situation.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news