Why the IRS says to hold off filing your tax return if you received a relief check in 2022

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If you qualify for special checks or rebates related to either tax surpluses or inflation in 2022, you might want to hold off on filing your tax return, the Internal Revenue Service (IRS) says.

The agency is clarifying whether these special state tax rebates should be taxed federally, an IRS spokesperson tells CNBC Make It.  

The "rules surrounding them are complex" and will require more time to determine the tax implications, according to an IRS statement. "We expect to provide additional clarity for as many states and taxpayers as possible next week."

The IRS recommends that tax filers who qualified for relief checks wait until "additional guidance is available or consult with a reputable tax professional." 

The IRS also recommended that those who have already filed a 2022 tax return not file an amendment.

It's not yet clear which specific states require more guidance, but at least 18 enacted one-time refunds in 2022, according to the Urban-Brookings Tax Policy Center: Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, New Mexico, New York, Oregon, Rhode Island, South Carolina and Virginia.

Most of those 18 states are still waiting to confirm whether the rebates will incur federal taxes, says Richard Auxier, a Tax Policy Center senior policy associate.

Federal taxation will depend on federal law and the stated purpose for each rebate, according to the Wall Street Journal. Stimulus payments related to Covid-19 relief were not taxable, but it's possible that rebates related to inflation relief or tax surpluses might qualify for federal taxation. Each state relief program is run differently, too, which adds to the confusion.

In California, for example, a special Middle Class Tax Refund meant to cover the costs of rising inflation won't be taxed by the state, according to the state's Franchise Tax Board. But it also concedes that the funds could be taxed federally

Similarly, in New Mexico, state taxes on a 2022 refundable income tax rebate meant to cover rising costs will not be charged, according to the state's Taxation and Revenue Department website. However, the site also says that the "department cannot comment on any federal tax consequences of the rebates and relief payments." 

In the meantime, tax filers who have qualified for relief checks or tax rebates might want to wait until there's more guidance from the IRS before filing, if they haven't filed already.

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