• About Us
    • Small Businesses
    • Mid-Size Businesses
    • Individual Taxpayers
  • Tax
    • Business Tax Preparation
    • Individual Tax Preparation
    • Trust and Estates Tax Preparation
    • IRS Audit
    • Unfilled Tax Returns
    • Tax Consulting
  • International Tax
    • Expat Taxation
    • New US Residents
    • Foreign Assets Reporting
    • Inbound International Tax
    • Outbound International Tax
    • Dual Status Taxpayers
    • Foreign Trust Taxation
    • Foreign Investment in US
    • FATCA compliance
    • Int’s Bookkeeping
  • Accounting
    • Financial Statements Preparation
    • Review of your Books
    • Quickbooks
    • Xero Accounting
  • Advisory
    • Business Best Practices Coaching
    • Entity Structure & Tax Elections
    • Accounting System Analysis & Implementation
  • Pricing
    • Free Initial Meeting
    • Tax Return Fees
    • Manageable Cost for Service Year Around
    • Free Quote
  • Portal
  • Contact Us
info@victoria-cpa.com
CLIENT PORTAL
Victoria Bogdanovich CPAVictoria Bogdanovich CPA
Victoria Bogdanovich CPAVictoria Bogdanovich CPA
  • About Us
    • Small Businesses
    • Mid-Size Businesses
    • Individual Taxpayers
  • Tax
    • Business Tax Preparation
    • Individual Tax Preparation
    • Trust and Estates Tax Preparation
    • IRS Audit
    • Unfilled Tax Returns
    • Tax Consulting
  • International Tax
    • Expat Taxation
    • New US Residents
    • Foreign Assets Reporting
    • Inbound International Tax
    • Outbound International Tax
    • Dual Status Taxpayers
    • Foreign Trust Taxation
    • Foreign Investment in US
    • FATCA compliance
    • Int’s Bookkeeping
  • Accounting
    • Financial Statements Preparation
    • Review of your Books
    • Quickbooks
    • Xero Accounting
  • Advisory
    • Business Best Practices Coaching
    • Entity Structure & Tax Elections
    • Accounting System Analysis & Implementation
  • Pricing
    • Free Initial Meeting
    • Tax Return Fees
    • Manageable Cost for Service Year Around
    • Free Quote
  • Portal
  • Contact Us

Taxpayers can exclude certain 2022 state payments from federal returns

Home Tax UpdatesTaxpayers can exclude certain 2022 state payments from federal returns

Taxpayers can exclude certain 2022 state payments from federal returns

February 15, 2023 Posted by Victoria Tax Updates

Days after instructing taxpayers in certain states to delay filing their 2022 federal tax returns if they received state general welfare or disaster relief payments or refunds in 2022, the IRS late on Friday clarified that those taxpayers generally will not have to report those payments on their federal tax returns.

In a news release (IR-2023-23), the IRS said that it “will not challenge the taxability of payments related to general welfare and disaster relief.” The IRS notes that payments made for the promotion of the general welfare or as a disaster relief payment (for example, because of the COVID-19 pandemic) may be excludable from income under the general welfare doctrine, by which payments made under legislatively provided social benefit programs for the promotion of the general welfare are excludible from gross income, or as qualified disaster relief payments under Sec. 139.

The IRS acknowledges the challenge of determining which payments made by various states in 2022 may fall under one of those exceptions and, because the issue affects only 2022 returns, has decided that “in the best interest of sound tax administration,” it will not challenge the treatment of any 2022 payment as excludable from income on an original or amended return. The IRS has provided a chart, listing the specific state payment types to which this relief applies.

Therefore, taxpayers in Alaska, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island will not have to report the listed state payments on their 2022 returns.

The IRS also said that taxpayers in Georgia, Massachusetts, South Carolina, and Virginia should not include state payments in income if “the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit.” A taxpayer may not have received a tax benefit if, for example, they itemized deductions but reached the $10,000 cap on deductibility of state and local taxes.

The news release cautions that other state payments (e.g., the annual payment of Alaska’s Permanent Fund Dividend) are generally includable in income for federal income tax purposes.

You also might be interested in

The Self-Rental Rules: Risks and Opportunities

Jul 9, 2024

The COVID-19 pandemic ushered in erratic price behavior for commercial[...]

Recent developments in estate planning: Other Developments 3

Mar 31, 2023

Modifying the GRAT rule: This provision would modify the rules for[...]

10 estate and income tax questions

Jul 19, 2023

It is important to consider the income tax ramifications of[...]

Recent Posts

  • Lower Auto Depreciation Limits Issued for First Time in at Least 3 Years March 13, 2025
  • The Potential Tax Liabilities of a Divorce February 10, 2025
  • Final Regs Address Taxes on Gifts to Taxpayers from Ex-U.S. Citizens, Residents February 6, 2025
  • Be Aware of Changes to Family Tax Credits February 3, 2025
  • BOI Reporting Still on Hold Despite Supreme Court January 30, 2025
Experience something completely different. Start Here

Contact Info

  • Victoria Bogdanovich, CPA
  • 3321 Bee Cave Rd Ste 201
  • 512-814-8311
  • info@victoria-cpa.com
  • www.victoria-cpa.com

Fresh from blog

  • Lower Auto Depreciation Limits Issued for First Time in at Least 3 Years
  • The Potential Tax Liabilities of a Divorce
  • Final Regs Address Taxes on Gifts to Taxpayers from Ex-U.S. Citizens, Residents
  • Be Aware of Changes to Family Tax Credits

© 2022 victoria-cpa.com

  • Home
  • About
  • Contact
Prev Next