ATLANTA — The Internal Revenue Service announced Friday that most relief checks issued by Georgia last year aren’t subject to federal taxes, providing 11th hour guidance as tax returns start to pour in.
Less than a week after telling payment recipients to delay filing returns, the IRS said it won’t challenge the taxability of payments related to general welfare and disaster.
This means taxpayers who received those checks will not need to report these payments on their 2022 tax returns -- meaning they won’t have to pay federal taxes on those payments.
This comes just three days after the IRS recommended that taxpayers in Georgia hold off on filing their tax returns for 2022 if they received a special tax refund or payment from the state last year.
The reason for that is they were deciding if those $250 and $500 state tax-rebate checks from last year should be declared as income -- income that the feds were deciding whether they wanted to tax, even though the state of Georgia is not taxing the rebates.
Now, with the decision being made by the IRS that most Georgia special refund checks will not be taxed, the IRS is telling people to not delay those income tax filings.
“The IRS appreciates the patience of taxpayers, tax professionals, software companies and state tax administrators as the IRS and Treasury worked to resolve this unique and complex situation,” the IRS said Friday evening in a statement.
Many taxpayers in Georgia will avoid federal taxes on state payments if they meet certain requirements, the IRS said.