You can go ahead and file….
Most people didn’t know anything about this and one could assume that any effort to tax ALL them checks would have generated a giant sized headache for Joe Biden….
The Internal Revenue Service said on Friday that most taxpayers who received one-time, state-issued payments last year to alleviate the pain of higher inflation would not need to report them as income on their federal income tax returns. But some taxpayers in four states may need to claim the special payments.
Last week, the agency told taxpayers to hold off on filing their returns until it could provide further guidance on how to treat the payments, which affected millions of people in nearly two dozen states.
The confusion arose because the I.R.S. had to decipher which payments were indeed taxable. Each state that sent checks to residents classified them slightly differently and had different eligibility requirements. Tax preparers and taxpayers were frustrated that the agency hadn’t settled the issue before it started accepting returns on Jan. 23.
Nearly three weeks into filing season, the agency sorted it out.
“The I.R.S. has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax return,” it said in a statement on Friday evening. “While in general payments made by states are includable in income for federal tax purposes, there are exceptions that would apply to many of the payments made by states in 2022.”….