Earlier this year, the IRS provided clarification on the federal tax status of special payments made by 21 states in 2022 that were mainly related to the pandemic. In a nutshell, qualified taxpayers in these 21 states aren’t required to include in income their state or local relief payments because the payments were made for “the general welfare or were a form of disaster relief.” The IRS has updated that earlier guidance because certain state payments authorized for 2022 were actually paid in early 2023. Taxpayers can exclude a state relief payment received in 2023, provided the payment was one that could have been excluded if received in 2022. For more information: https://bit.ly/45tS6EP
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