Without federal stimulus checks in 2022, a number of states provided tax rebates and other forms of aid to residents battling the COVID-19 pandemic and soaring inflation.
In 2022, taxpayers in at least five states will be required to report any tax refunds or relief payments they received.
Which States Sent Stimulus Checks In 2022?
Now that tax season has arrived, many individuals worry that they must include this income on their tax returns. Those who received special tax refunds or payments from their state governments were advised by the IRS on February 3 to wait for additional clarification before submitting their 2022 tax return.
A week later, the IRS clarified that taxpayers in many states would not be required to record these payments.
In 2022, there were no federal stimulus checks, but at least 22 states provided residents with rebates on income and property taxes, tax credits for children, and direct relief payments. If you lived in one of the following states in 2022, you might have gotten funding:
- Alaska
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Maine
- Massachusetts
- Minnesota
- New Jersey
- New Mexico
- New York
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- Virginia
Alaska, which gives a Permanent Fund Dividend to its residents annually, provided the largest payment of $3,124 to each adult and child qualifying in 2022.
California issued the most transactions: The Franchise Tax Board issued about 31,650,000,000 tax refunds to middle-class individuals.
Is Your Rebate Payment Taxable?
The IRS has determined that taxpayers are not required to report payments relating to general welfare and disaster relief, which includes COVID-19-related checks.
It said that money received from the states of California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island will not be taxable.
This ruling also applies to $662 of Alaska’s payment, which originated from an energy relief payment. The remaining payment from Alaska is taxable as federal income.
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Who Should Pay Taxes on 2022 Stimulus Checks?
Georgia, Massachusetts, South Carolina, and Virginia residents who itemized deductions in 2022 and obtained a tax advantage from those deductions must pay federal taxes on their state rebates.
Although the rebates in these four states were for state taxes paid, they are not taxable if the taxpayer exceeded the $10,000 level in 2022 or used the standard deduction without receiving a tax benefit from state taxes.
Minnesota, which gave a bonus payment to frontline healthcare workers in 2022, was not mentioned by the IRS. According to the Minnesota Department of Revenue, however, the payment is federally taxable and must be reported on line 8 of Form 1040.
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