IRS Says State Issued Stimulus Payments are Not Taxable

After several days of requests by taxpayers, state agencies and the National Taxpayer Advocate, the Internal Revenue Service has provided clarifying the federal tax status involving special payments made by 21 states in 2022.

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.

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