IRS Has Warning for People in 21 States

IRS Has Warning for People in 21 States

( – If you’ve filed an early tax return, you might need to start over. The IRS is advising taxpayers in 21 states to consider filing an amendment. The good news is if you’re affected, you’ll probably end up having to declare less taxable income.

On April 11, the IRS released a statement advising millions of taxpayers to file amended tax forms now that a decision on stimulus checks has been made. The IRS has been puzzled over whether the payments, which many states handed out last year to help residents through the tail end of the pandemic, should be counted as taxable income. While it thought about it, it advised taxpayers not to file their returns early. However, not everyone took that advice. Now the agency has decided the stimulus checks aren’t taxable, so anyone who filed a return and listed the payments risks paying extra tax unless they correct the error.

The new advice affects up to 28.8 million people who filed their tax returns before February 10 — a figure the IRS says is only 0.8% lower than last year, despite the advice to wait. The states involved are Alaska, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, South Carolina, Rhode Island and Virginia. The IRS is now advising anyone in these states who filed early and included stimulus payments as income when they prepared their returns to check if they paid the unnecessary tax. If they did, they should file an amendment. This can be done online or with a paper copy, but the IRS says refunds will be quicker for electronic returns.

Luckily, there’s no rush to get this done. The filing deadline for 2022 tax returns is April 18, but the IRS will accept amended 2022 returns until April 2026. However, with inflation still high, any refund you get will be worth a lot less by then; it’s best to submit an amended version as soon as possible.

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