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The Internal Revenue Service (IRS) announced that some U.S. states may not report their relief payments on the tax return 2023. This is after the IRS worked to determine whether these payments are subject to the federal income tax.
![Relief Payments [Photo: Marketplace.org]](https://s3.us-west-1.amazonaws.com/southarkansassun.com/2023/02/GettyImages-1250738075-crop-1-1.webp)
Relief Payments [Photo: Marketplace.org]
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Relief Payments in States
According to Loe, the relief payments are classified differently in every state. Some are called inflation relief, others named disaster relief, or even a tax credit. This is also one of the reasons why IRS took some time to determine whether these payments are taxable or tax exempt in the tax return 2023. Reportedly, several resident of California who received tax refunds in 2022 were not able to file the tax returns that year. This is because of the uncertain guidelines on whether the tax refunds should be reported in tax returns.
Furthermore, some states that issued relief payments in 2022 stated that the payments may be tax exempted in the state level, but may be taxable in the federal level of the tax return 2023. For instance, the states of Idaho and New Mexico issued tax rebates that are tax exempted in the state level, but are not certain whether they are taxable in the federal level.
