The Internal Revenue Service (IRS) has at long last issued guidance about how to handle state stimulus payments, which comes about a week after it issued an alert advising millions of taxpayers to delay filing tax returns until it provides “additional clarification” about the payments’ taxability.
In a statement issued late Friday, the IRS said that most relief checks issued by states last year are not subject to federal taxes.
“The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns,” the agency said in the statement….