IRS Advises Individuals In 19 States To Hold Of On Their Returns

The Internal Revenue Service issued a statement last Friday telling Individual Taxpayers to wait a week before filing their personal income tax returns. The issue is whether or not special tax refunds or payments will be taxable at the Federal Level.

Special tax refunds were offered in 19 states last year. Those states include Illinois, Alaska, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Maine, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, and Virginia.

In Illinois, Individuals were offered an income tax rebate between $50 and $100. There was also a property tax credit available up to $300.

The Service stated that it will clarify its position on these special tax refunds and payments as soon as next week. Depending on your state of residence, these payments may or may not be taxable at the state level.

I will continue to inform as additional facts are presented.

Let me leave you with this.

Whether or not these payments will be taxable is anyone’s guess. If they’re treated like an income tax refund then they would probably be included with the other state tax refund on the federal return.

On the other hand, if they’re treated like a payment, then they would probably be taxable like any other grant. Time will tell.

We should know the Service’s position in the next week, so it probably won’t hold anything up too severely. Since we won’t be working on 1040’s until the majority of the corporations are done a month from now, please get your work into us today.

I sent out the first S Corp returns yesterday. Our software was finally updated to a point where these could be completed, so tax season is officially open.

If you or any of your friends are looking for a good accountant, please contact me today. There’s always a place in my practice for good clients.

We’re all going to get through this. Let’s get through it together.

Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, M&A Due Diligence, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and Iremian,

Sincerely yours,

Chris Amundson
Accounting Solutions Ltd.

Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.