|
Last year, Illinois and 18 other states offered inflation relief
payments or refunds for taxpayers and now the IRS is uncertain
about the taxability of the payments.
“The IRS is aware of questions involving special tax refunds or
payments made by states in 2022; we are working with state tax
officials as quickly as possible to provide additional
information and clarity for taxpayers. There are a variety of
state programs that distributed these payments in 2022 and the
rules surrounding them are complex,” the IRS said in a
statement.
Tom O’Saben is a tax expert in Glen Carbon and is the director
of Tax Content and Government Relations with the National
Association of Tax Professionals. He can’t recall the IRS making
a similar request.
“I know when we had the American Rescue Plan back in 2021 and we
got that late guidance on the part of unemployment being
excluded, but I have been doing taxes for 32 years, I am not
aware the IRS has said to wait on filing,” O’Saben told The
Center Square. “It’s nearly unprecedented, yes.”
Maura Kownacki, spokesperson for the Illinois Department of
Revenue, said it is a little more cut-and-dry in Illinois.
“The Illinois tax rebates are not subject to Illinois income
tax, and the Internal Revenue Service has not determined if they
will be taxed at the federal level,” Kownacki told The Center
Square.
The IRS is also recommending to those who have already filed
their tax returns not to file an amendment. O’Saben agrees with
that advice.
“For those who have already filed their returns, don’t do
anything,” said O’Saben. “We believe that for more than 90% of
the population, it is probably a nonevent.”
The IRS is expected to clarify the situation in the coming days.
Kevin Bessler reports on statewide issues in
Illinois for the Center Square. He has over 30 years of
experience in radio news reporting throughout the Midwest.
|
|
