ATLANTA — The Internal Revenue Service is recommending 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 IRS issued the guidance Friday due to the agency’s uncertainty about the taxability of the payments. The IRS is deciding now if those $250 and $500 state tax-rebate checks from last year should be declared as income-- income that the feds may want to tax, even though the state of Georgia is not taxing the rebates.
“We are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers,” the IRS said in its statement.
For residents in Georgia and other states across the country, the agency is recommending that they hold off on filing their tax returns until they receive further instruction from the IRS.
“It is pretty frustrating,” said Jonathan Levens of the Atlanta firm Moore Colson CPA.
Levens said Wednesday that the uncertainty is impacting tax filers in Georgia and 19 other states that issued state tax rebates last year.
So at his firm, Levins said, "We are going to hold off on filing any individual returns for the time being, unless there is a real, true kind of economic need for that person to file as quickly as possible," such as the taxpayer needing a refund as soon as possible.
If you received a state tax refund last year, here is what you need to know.
If you got a tax refund in Georgia in 2022, the IRS is recommending you hold off on filing your tax return until the agency gives further instructions. Certain states that provided these refunds have determined that these payments are not taxable for most people.
What needs to be determined is if these refunds are taxable on the federal level, said Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals.
In some states, people would get taxed if they received a tax refund in 2022 only if they itemize their deductions, said Keith Hall, president and CEO of the National Association for the Self-Employed.
Following the IRS' recommendations is key if taxpayers want to avoid having to amend a previously filed tax return, Hall said.
“I think the IRS is trying to help people save another filing, if they had to do an amended return,” he said.
The IRS is also recommending that you don’t file an amended return yet. If you believe you need to file an amended return, the IRS advises you to wait until further instructions are given.
Last year, 19 states offered diverse programs that offered inflation relief payments or refunds for taxpayers. Special tax refunds were offered by: Alaska, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, and Virginia.
If you are not sure if you need to wait to file your taxes, Hall recommends you consult with a tax professional about your specific situation.
The Georgia Department of Revenue is not offering any guidance to Georgia taxpayers until the IRS decides what to do, which the IRS expects could be within a week or two.