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IRS: Taxpayers won’t Need to Report Middle-Class Tax Refund as Income

The IRS clarified that taxpayers from more than 20 states do not need to include the Middle-Class Tax Refund as their income.
The IRS clarified that taxpayers from more than 20 states do not need to include the Middle-Class Tax Refund as their income. (Photo: Forbes)

On February 3, the Internal Revenue Service asked taxpayers from more than 22 states to hold off on filing their taxes as they needed to decide whether to tax the Middle-Class Tax Refund.

Yahoo Finance reported twenty-two states, including California, had authorized the Middle-Class Tax Refund last year as their reserves were maintained by strong economic growth and pandemic aid. The payment is also aimed at helping their residents face surging inflation.

CBS News said the IRS announced Friday that taxpayers in “many states” won’t have to report the Middle-Class Tax Refund on their 2022 tax returns. The agency noted, “… the IRS determined it will not challenge the taxability of payments related to [the] general welfare and disaster relief.”

IRS said taxpayers who received the special payment from the Middle-Class Tax Refund don't have to include it as their income.

IRS said taxpayers who received the special payment from the Middle-Class Tax Refund don’t have to include it as their income. (Photo: Yahoo News)

Also Read: IRS: Unsure if the 2022 Special Payments Should be Subjected to Federal Taxes 

The taxpayers who received rebates from the following states won’t need need to report them as income:

Alaska                                 Illinois

California                            Indiana

Colorado                             Maine

Connecticut                         New Jersey

Delaware                             New Mexico

Florida                                New York

Hawaii                                Oregon

Idaho                                  Pennsylvania

Rhode Island

Meanwhile, taxpayers from Georgia, Massachusetts, South Carolina, and Virginia may report their rebate depending if they meet some requirements. The IRS said the taxpayers don’t need to report the Middle-Class Tax Refund as income if it is a refund of state taxes paid. And if the taxpayer claimed the standard or itemized deduction, but did not receive a tax benefit.

Read More: Check to See If You’ll Get Paid in February: California Inflation Relief/Middle Class Tax Refund 

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