Call Kurtis: IRS suggests Californians hold off on filing taxes over gas tax rebate question
SACRAMENTO -- After pressing the IRS for answers for more than a week, the agency says it is working on guidance on whether you owe federal taxes for your California Gas Tax Rebate also known as the Middle Class Tax Refund.
"The IRS is aware of questions involving special tax refunds or payments made by states in 2022; we are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers," said an IRS statement. "There are a variety of state programs that distributed these payments in 2022 and the rules surrounding them are complex. We expect to provide additional clarity for as many states and taxpayers as possible next week."
California issued more than $9 billion in payments. Some were caught off guard when the Franchise Tax Board issued 1099-MISC forms for their payments. The FTB said it was required to mail them out for payments above $600. The state's tax agency says you don't owe state taxes, but may owe the IRS.
Local tax professionals have said they don't think you'll owe federal taxes based on two IRS tax codes, but wanted the IRS to issue guidance.
The IRS now says, "For taxpayers uncertain about the taxability of their state payments, the IRS recommends they wait until additional guidance is available or consult with a reputable tax professional. For taxpayers and tax preparers with questions, the best course of action is to wait for additional clarification on state payments rather than calling the IRS. We also do not recommend amending a previously filed 2022 return."