April 28, 2023 2:44 am

Amended 2022 Returns for State Tax Refunds

On February 10, 2023, the IRS clarified that certain tax refund payments made in 2022 by 21 states were not income for federal tax purposes (IR-2023-23). Those who filed their 2022 federal income tax returns before February 10 should file an amended return if they included those payments in income (IR-2023-77). This means the state payments do not have to be reported as income by taxpayers in: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. Alaska is in this group as well, but the determination applies only to the special supplemental Energy Relief Payment received. IR-2023-23 has a chart listing the eligible state payments. The same rule also applies to certain state refunds received in 2022 by taxpayers in Georgia, Massachusetts, South Carolina and Virginia.

Tax Glossary

Capital asset

Property subject to capital gain or loss treatment. Almost all assets you own are considered capital assets except for certain business assets or works you created.

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