IRS won’t tax most relief payments made by states last year

By DAVID SHARP
Associated Press

The IRS says most relief checks issued by states last year won’t be subject to federal taxes, providing late guidance as taxpayers have begun filing returns. The IRS said it won’t challenge the taxability of payments related to general welfare and disaster, meaning taxpayers who received those checks won’t have to pay federal taxes on those direct payments. The guidance on Friday came a week after the IRS told payment recipients to delay filing taxes. All told, the IRS said special payments were made by 21 states in 2022.