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See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View ProSeries Hot Topics.
See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View ProSeries Hot Topics.
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- MA excess revenue returned to taxpayers
MA excess revenue returned to taxpayers
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dad751
Level 3
02-08-2023
07:41 PM
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It's Wednesday 2/8 and I just saw on the news that the IRS and DOR have not decided if the excess revenue that was returned to taxpayers in proportion to the personal income tax liability they incurred in tax year 2021 that was received towards the end of last year is taxable or not. They are recommending not to file your taxes until they figure it out. And if it is taxable then they will have to amend their returns.
Just great let's double the workload. Now I have to call my clients that have filed and let them know I might have to amend and that they will probably owe money to the fed and state.
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3 Comments 3
sjrcpa
Level 15
02-08-2023
09:06 PM
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How much money did MA people get?
In VA and CA it's not too large.
If it's considered an income tax refund it's only taxable to the extent they itemized deductions and got a tax benefit for it.
Search these forums and see the lengthy discussions about the CA Middle Class Tax Refund MCTR.
The more I know, the more I don't know.
dad751
Level 3
02-09-2023
08:04 AM
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Mine was close to $1000. It's just a pain now to tell clients that this might happen and they might have to amend. Plus the state wants us not to file until it gets resolved. I had a person yesterday that said he didn't care just to file anyway. I'm thinking of giving people the option of filing now and amending later or letting the IRS and DOR do the work for me and sending them a bill if necessary.
rbynaker
Level 13
02-09-2023
08:44 AM
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I'm no MA expert but from google it looks like you got ~14% of your tax back (but I don't believe everything I read on the Internet). Sounds to me like you only got money back if you paid in. I would conclude that this is a tax refund, subject to the tax benefit rule (as SJR said). I'm not holding up VA returns, VA reported the refunds on the 1099-G so they clearly think this is a tax refund (and I agree with them). I suspect MA will be the same.
