Tax season 2023: IRS advises early filers to consider filing an amended return if they reported tax refunds as taxable

Asher Notheis

April 12, 02:06 PM April 12, 02:06 PM

Taxpayers who jumped early on filing their taxes this year might want to file an amendment if they reported certain refunds they received last year as taxable.

The IRS issued a clarification in February regarding the federal tax status for special payments issued to taxpayers in several states last year, in which the agency determined that taxpayers in many states did not need to report these payments on their tax returns. Because of this, taxpayers who filed prior to this clarification on Feb. 10, as tax season started on Jan. 23, should check if filing an amendment is in order, the IRS announced Tuesday.

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The states where residents are not required to report these state payments on this year's tax return are California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island. For residents of Alaska, the only state payment they do not need to report on their 2022 taxes is the supplemental Energy Relief Payment they received.

Residents of Georgia, Massachusetts, South Carolina, and Virginia are also not required to include special state 2022 tax refunds as income under certain conditions. These conditions consist of if the payment residents received was a refund of state taxes paid, as well as if the recipient either claimed the standard deduction for the tax year 2022 or itemized their tax year 2022 deductions but did not receive a tax benefit.

Taxpayers who think they meet these requirements and filed prior to Feb. 10 should check their tax return to see if they paid tax on a state refund before filing an amended return. For taxpayers who used a tax professional when filing taxes, they should check with said professional to determine if filing an amended return is called for.

A taxpayer can also opt to send in a paper amendment, though they will not receive their refund through direct deposit and instead receive a paper check.

Taxes are due on April 18, not April 15, due to it falling on a weekend this year. In addition, April 17 is recognized as Emancipation Day in Washington, D.C., and all Washington holidays affect tax deadlines across the United States, meaning that tax returns will be due on the following business day, April 18.

Taxpayers who are awaiting their refund can check online using the IRS's "Where's my refund" tool, which is free to use.