![]() A variety of state programs distributed these payments in 2022 and the rules surrounding their treatment for federal income tax purposes are complex. The IRS is aware of questions involving special tax refunds or payments made by certain states related to the pandemic and its associated consequences in 2022. For these individuals, state payments will not be included for federal tax purposes 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. In addition, many people in Georgia, Massachusetts, South Carolina and Virginia also will not include state payments in income for federal tax purposes if they meet certain requirements. Alaska is in this group as well, but please see below for more nuanced information. This means that people in the following states do not need to report these state payments on their 2022 tax return: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns.ĭuring a review, the IRS determined it will not challenge the taxability of payments related to general welfare and disaster relief. This will only confuse the IRS and delay your refund even longer.The Internal Revenue Service provided details clarifying whether special state tax payments issued by 21 states in 2022 are taxable. Also, don't file a second return or an amended return for 2021. The IRS is already behind on opening and answering paper correspondence, and your letter will just fall to the bottom of the pile. If your representative happens to sit on the House Ways & Means Committee, that's a plus.Ī couple of things you should not do: Don't write to the IRS regarding your late tax refund. ![]() Much of it depends on how helpful and knowledgeable the congressional aide answering the phone is on this topic. This might sound like a long shot, but we've heard from some people who had success doing this. Unfortunately, TAS can't assist with delayed refunds in most situations, but this is an instance in which it can still be of help.Īnother suggestion is to contact your congressional representative. If you've contacted the IRS about your delayed refund with no results, and not having the money is causing you a financial hardship, you can try calling the IRS's Taxpayer Advocate Service. Tax Changes and Key Amounts for the 2022 Tax Year The IRS says it will get through its backlog of unprocessed returns by year-end, but this isn't much relief to people who are still awaiting tax refunds on their 2021 returns that they filed months ago. Refunds on paper-filed returns, which the IRS usually pays to filers within six to eight weeks in normal years, are taking four months or longer to be paid. And there are very, very long waits for tax refunds. Of these, 1.8 million returns require special handling, such as error correction, and 8.4 million are paper 1040s waiting to be processed and reviewed. As of July 29, it had 10.2 million unprocessed 2021 individual returns. The bad news is that the IRS still has a backlog of millions of unprocessed 2021 returns that were filed this year, the vast majority of which are paper-filed returns. As of this summer, the IRS finished processing all individual returns it received in 2021 that had no errors, including 2020 e-filed and paper forms. ![]() As of June 25, 2021, there were 16.7 millforms that still required manual processing. Agency statistics from 20 demonstrate the forward movement made by the IRS. The good news is that the IRS has made progress on its processing of returns, in part because it went on a hiring spree and shifted current personnel from other areas to assist with the backlog. The Inflation Reduction Act and Taxes: What You Should Know
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