Some Californians are going to strike it rich, only this time, it isnt during the gold rush, but during the tax season.
According to Fox 11 Los Angeles, the IRS is urging taxpayers in California, and other select states, to hold off on beating the April deadline for filing tax returns. Putting the brakes on filing is for one of the millions of people who received either a payment from their state or taxpayers who received a special tax refund when filing last year.
Programs were available last year in 19 states, designed to offer payments for inflation relief or refunds. An announcement by the IRS was made on Friday due to the agency, at this time, needing to be more precise about how the payments will be taxed.
A statement issued by the IRS says, We are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers.
A statement by Director Tom OSaben at the National Association of Tax Professionals said, What needs to be determined is if these refunds are taxable at the federal level.
President and CEO Keith Hall of the National Association for the Self-Employed said, In some states, people would get taxed if they received a tax refund in 2022, only if they itemize their deductions.
The Franchise Tax Board also reminds Californians that state and federal taxes are different.
Heeding the advice and recommendations of the IRS is vital if taxpayers want to avoid filing a tax return amendment. Hall said, I think the IRS is trying to help people save another filing if they had to do an amended return.
The IRS also recommends filing an amended return for those who have already filed and received a refund only after further instructions are forthcoming from the agency.
The states that offered the special tax refunds in 2022 include Alaska, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, and Virginia.
For taxpayers still determining if holding off on filing applies to their situation, the recommendation is to contact a professional tax consultant for guidance.
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