Officials have released $850 relief checks in Maine to help individuals and families weather the economic impact of the pandemic. But the Internal Revenue Service clarified that the Maine pandemic relief payments will not be subject to federal income tax.
According to the IRS, these payments are considered qualified disaster relief payments, which are not taxable under federal law. The IRS defines qualified disaster relief payments as “amounts paid to or for the benefit of an individual to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster.”
$850 Relief Checks in Maine: IRS Says It’s Not Taxable
Similar to federal stimulus checks given in 2021, Press Herald said the officials stated that they expected the $850 relief checks in Maine would not be subject to federal income taxes.
Maine officials added that the payments, which came from a state budget surplus, are not taxable in Maine and were made to assist Mainers in coping with rising inflation and the COVID pandemic’s lasting economic effects.
However, the same officials never questioned the IRS, which earlier this week stated that it had not reached a decision about the taxability of the $850 relief checks in Maine. The government advised people to delay submitting their 1040s until a decision was reached in the meantime.
The IRS’s notification on Friday only addressed the $850 relief checks in Maine; it did not address the $450 winter energy assistance checks that the state of Maine has started sending to households in the state.
In the same Press Herald report, Gov. Janet Mills expressed her appreciation for the IRS’s acknowledgment that the relief payments, as intended by the administration and legislature, are following federal tax law and are not subject to federal taxes.
South Carolina’s $800 Relief Funds
Maine is not the only state to provide $850 relief checks to its residents. The Sun said South Carolina’s deadline to submit an application for two one-time relief checks totaling up to $800 is on February 15.
The initial payment comes from a fund established to provide tax assistance to families affected by Hurricane Ian, which made landfall in September.
The second is a tax credit for citizens who would owe individual income taxes in 2021.
The US Small Business Administration and the Federal Emergency Management Agency (FEMA) awarded $4.11 million to hurricane Ian victims.
As long as they file by today, people and families that live in South Carolina or operate a company there are eligible for the relief.
Residents who submitted their taxes by October 17 received the first round of these payouts already.