Some receivers of stimulus check payments could end up having to pay taxes on the cash they received.
This is after 17 states— California, Colorado, Delaware, Florida, Hawaii, New Mexico, and South Carolina (per Go Banking Rates)—issued inflation relief check payments in 2022.
The dispersed funds are reported as revenue by the states that issued payments.
Stimulus Check Payments: It’s Taxable For Some States!
The Motley Fool said the California Franchise Tax Board chose to notify the Internal Revenue Service if middle-class refunds totaled more than $600.
Although California stimulus check payments were free from state income tax, the IRS might still see them as income.
Keep an eye out for a 1099-MISC form in the mail to discover if your state stimulus cheque is taxable.
You must disclose your stimulus funds on your federal tax return if your state sends one of these.
The postmark deadline for the majority of 1099-MISC forms is January 31, 2023. The paperwork should come within the next couple of weeks for recipients of eligible stimulus checks.
ALSO READ: Stimulus Payments: States In America Are Getting Stimulus Checks Up To $600, Is Your State One?
What About Those Non-Taxable Payments?
Reports said the IRS does not consider stimulus payments made under the American Rescue Plan Act of 2021, the 2021 Coronavirus Response and Relief Supplemental Appropriations Act, or the Coronavirus Aid, Relief, and Economic Security Act to be taxable income as a general rule.
Legislation has been adopted to give tax rebates to residents in 19 places, such as Alaska, where people are entitled to an annual payout of $3,200 under the state’s Permanent Dividend Program.
In October, stimulus check payments began to be given out in California to the roughly 23 million Golden State residents who qualified.
People who earn $75,000 or less will receive a one-time stimulus check payment of $350, while couples filing jointly who earn no more than $150,000 would receive a payment of $700.
Colorado also paid refunds of $750 to individuals and $1,500 to couples who filed jointly.
As part of Hope Florida, some Florida homeowners also gave each kid a one-time stimulus check payment of $450.