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Taxpayers Who Reported Certain State Tax Refunds May Need To File Amended Returns


Individuals who filed their federal income taxes early this year (before the April 18th deadline) and who also reported certain state tax refunds as taxable income may need to file an amended return. This primarily affects taxpayers who reported their receipt of special state payments in 2022 that were related to general welfare and disaster relief. Call our office today for help determining whether you claimed a state benefit for which you could receive a refund if you file an amended return.

Certain Taxpayers Don’t Have to Report State Payments 

The IRS recently determined that taxpayers in specific states are not required to report special state refunds or rebates as taxable income on this year’s return. This includes those who filed their returns and payments in:

  • California;
  • Colorado;
  • Connecticut;
  • Delaware;
  • Florida;
  • Hawaii;
  • Idaho;
  • Illinois;
  • Indiana;
  • Maine;
  • New Jersey;
  • New Mexico;
  • New York;
  • Oregon;
  • Pennsylvania; and
  • Rhode Island.

Technically, Alaska falls under this category as well, but only in regards to special supplemental Energy Relief Payments. Furthermore, taxpayers in Georgia, Massachusetts, South Carolina, and Virginia don’t have to include any special state tax refunds as income on their 2022 returns, but only if they meet certain requirements. In these cases, state payments don’t have to be included in income calculations if:

  • The payment is a refund of state taxes that were actually paid; and
  • The recipient claimed the standard deduction or itemized his or her deductions, but didn’t receive a benefit.

Taxpayers who live in these states and who filed before February 10th may have been unaware that they were not required to include these payments and rebates as federal income. Those who fall under this category and who paid tax on a state refund should consider filing an amended return and requesting a refund.

Filing an Amended Return 

If a taxpayer does decide to file an amended tax return, he or she can do so electronically and can also choose to select “direct deposit” to receive their resulting refund. By filing electronically, taxpayers can cut the time that their amended return would otherwise spend in the mail, while using direct deposit provides a quicker and more secure way to receive a refund. Taxpayers do, however, have the option of submitting a paper version of an amended return and receiving a paper check. Direct deposit is not, however, available on amended returns that were submitted through the mail.

Did You Pay Taxes on a State Refund or Rebate? 

If your answer to this question is yes, or you are unsure about what types of state refunds qualify for this exception, you should consider reaching out to an attorney for help. Ronald Cutler, P.A. is a CPA, former FBI Special Agent, and experienced nationwide tax return preparation lawyer and is standing by to help you with your questions and concerns. Call our office at 386-490-9949 to set up a free case review with a member of our legal team. You can also reach out to us via online message.