2023 Tax Season: What To Know If You Received a Stimulus Check Last Year

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From 2020 to 2021, Americans were showered with billions of dollars of federal stimulus payments. The third and final stimulus checks were sent out beginning in March 2021, and the last day to file a claim for missing checks was Nov. 15, 2022. This means that except in the most extraordinary cases, no Americans received federal stimulus checks in 2022.

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If for some reason you are still missing a stimulus check to which you think you are entitled, you may be able to amend a past return to claim your payment, but you’ll have to work with a tax professional to see if that is even feasible. 

Although federal stimulus programs have ended, numerous states issued their own payments in 2022, described as everything from tax refunds to inflation relief payments. Due to the nature of those payments, there has been some confusion as to how taxpayers should handle them when they file their returns. Here’s a look at the latest updates. 

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Federal Stimulus Payments

The federal stimulus payments issued in 2020 and 2021 were not taxable. However, they still needed to be reported on federal tax returns. This was primarily to ensure that all qualifying Americans received the proper payment, but it caused some confusion as to how stimulus payments should be reported and if they were taxable. The bottom line, however, is that the IRS deemed federal stimulus payments to be nontaxable.

State Stimulus Payments

In 2022, numerous states issued various forms of stimulus payments, with many described as inflation relief payments. The going assumption was that the IRS would consider these payments nontaxable, as it had with federal stimulus checks. However, the agency actually muddied the waters by issuing a somewhat vague “wait and see” directive in early February 2023. At that time, the IRS actually told taxpayers who received a state stimulus payment that they should hold off on filing their returns until the agency could determine if those payments should be taxable. 

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Final IRS Ruling on State Inflation Relief Payments

Fortunately, the IRS didn’t keep taxpayers on pins and needles for too long regarding this issue. A few days after it advised taxpayers to hold off on filing their returns, it formally declared that state inflation relief payments issued in 2022 would not be considered taxable income. The reasoning given was that the IRS doesn’t tax “general welfare and disaster relief” payments. Regardless of whether they were dubbed “inflation relief payments” or some other moniker, stimulus payments issued by states in 2022 fell under the general blanket of this exemption.

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The Bottom Line on Stimulus

Whether you received federal stimulus checks in 2020 and 2021 or state inflation relief checks in 2022, you won’t have to pay tax on any of them. These stimulus payments are all considered to be nontaxable relief payments by the IRS. 

Unlike the federal payments, however, you won’t have to report any of your state stimulus payments when you file your federal tax return. This is because the federal government doesn’t need to reconcile state payments you’re entitled to with those you have received. If you’re entitled to a state stimulus payment and haven’t received it, you’ll have to take that up with your state taxing authority, not the IRS. 

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About the Author

After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.
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