The Internal Revenue Service (IRS) has confirmed that taxpayers who have already reported and filed their inflation relief as income may now be eligible for a refund as the stimulus checks were not subject to federal tax.
Tax Refunds ( Photo: AS USA )
The announcement advises taxpayers who have already paid tax on the relief checks to “check their tax return to make sure they paid tax on a state refund before filing an amended return.”
Residents of 16 US states, including California, Florida, and New York, do not need to report state payments, but those living in Georgia, Massachusetts, South Carolina, and Virginia may need to include special state 2022 tax refunds as income for federal tax purposes if they meet certain requirements.
Taxpayers who submitted their original 2022 return electronically can file an amended return electronically again, and a new feature should enable some to receive their cash refunds quicker. The IRS confirmed in February that taxpayers can now select direct deposits “for quicker delivery of refunds,” rather than waiting for a paper check, which can add time to the amended return process.
However, those who did not submit their original return electronically, can file a paper version of Form 1040-X, Amended US Individual Income Tax Return, and receive a paper check in the mail.
The IRS’s Acting Commissioner, Doug O’Donnell, said, “This is a big win for taxpayers and another achievement as we transform the IRS to improve taxpayer experiences.” However, amended returns can take up to three weeks to appear in the IRS system after they were mailed and up to 16 weeks to process.
Consumers can check the status of their amended returns online
Tuesday’s update ends weeks of confusion for Americans who did not know what they should do if they already filed and made their claim.
Early filers may face more work to do once again, as refund delays are not uncommon. Last year, many Americans were waiting on thousands of dollars in refunds from the IRS after filing before the American Rescue Plan became law.
National Taxpayer Advocate Erin Collins noted that the failure to identify and resolve the current issue before the filing season suggests that someone or everyone was “asleep at the switch.”
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