Millions of taxpayers received some welcome news on Friday when the IRS revealed the federal tax status of special Stimulus Checks made by 21 states in 2022. The payouts, which have also been referred to as “stimulus checks,” “inflation relief payments,” or simply “tax refunds,” were made to qualified citizens across the nation in a variety of amounts and through a number of different schemes. (Some of the so-called state “stimulus” payments, which were frequently funded by surpluses in state budgets because of the epidemic, are still being given out in 2023.)
Stimulus Checks Are Not Taxable
The IRS referred to the tax issue involving the payments as “unique and complicated.” In order for the IRS to determine whether the special payments would be considered taxable income, the agency had lately urged taxpayers who had received the payouts to postpone filing their 2022 tax forms. Upon consideration, the IRS declared that it would not contest the taxability of the majority of the special state payments. The IRS notice covers several state payments issued in 2022 under various categories. The IRS first decided that it wouldn’t contest any exceptional state payments made in 2022 “related to the general welfare and disaster assistance.”
California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, and Indiana are states that will receive special payments in 2022. In 2022, payments were sent to inhabitants of Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island that the IRS deemed to be “connected to the public welfare and catastrophe relief.” The IRS will not question the tax status of the state special Stimulus Checks you received if you reside in one of the sixteen states.
Some of the special supplementary energy assistance payments made to Alaskans in 2022 are deemed to be “connected to the general welfare and catastrophe relief” by the IRS. The IRS will not contest the payments since they fall under the same heading as other state inflation relief payments.
