Virginians Can File 2022 Taxes After IRS Rules On VA Special Payments

VIRGINIA — The Internal Revenue Service is giving Virginians a pass on state payments for general welfare and taxpayers can proceed with filing their 2022 tax returns. The IRS on Friday issued federal tax guidance for millions of Americans who received state rebates or payments in 2022.

Virginia is one of 19 states that last year made inflation relief payments or refunds for taxes. Taxpayers in those states were told about a week ago to wait for clarification before filing their income taxes.

But the IRS said Friday that Virginia taxpayers and residents of the other states on hold do not need to report special payments for welfare or disaster relief on their federal return.

The announcement came about a week after the agency had urged those taxpayers to hold off on filing while it determined if the funds are taxable on federal returns, CNBC reported.

The IRS said Friday it has determined that "in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns.

During a review, the IRS determined it will not challenge the taxability of payments related to general welfare and disaster relief."

This means that people in the 19 states, including Virginia, do not need to report these state payments for general welfare and disaster relief on their 2022 tax return.

In Virginia, state payments don't have to be included in income for federal tax purposes if the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit (for example, because the $10,000 tax deduction limit applied), according to the IRS.

Following the IRS recommendations is key if taxpayers want to avoid having to amend a previously filed tax return, Keith Hall, president and CEO of the National Association for the Self-Employed, told The AP.

“I think the IRS is trying to help people save another filing if they had to do an amended return,” he told the AP.

Other states that offered inflation relief in 2022 were Alaska, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island and South Carolina.

The 2022 federal income tax filing deadline is Tuesday, April 18.

For additional information, visit www.tax.virginia.gov.

For questions abut federal taxes, visit www.irs.gov.

• Related: Income Tax Season 2022: What To Know Before Filing In Virginia

If you are not sure about state payments as you prepare to file your taxes, Hall recommends you consult with a tax professional about your specific situation.

The Associated Press contributed reporting.