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  1. Taxes
  2. Tax Breaks

IRS Decides State Stimulus Checks Aren't Taxable After All

By: Sarah Hansen
Sarah Hansen, expert in Personal finance, investing, saving, retirement, budgeting, taxes, and Senior Writer at Money
Sarah Hansen
Senior Writer | Joined October 2021
Sarah Hansen is a senior writer at Money covering all things personal finance. Previously, she covered economic policy and capital markets on the breaking news desk at Forbes.
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Editor: Julia Glum
Julia Glum, expert in the IRS, taxes, credit scores, saving, colleges, mobile payment apps, and News Editor at Money
Julia Glum
News Editor | Joined February 2018
A graduate of the University of Florida, Julia has more than five years of experience in personal finance journalism. In addition to overseeing news coverage, she leads Money’s tax coverage, which includes extensive reporting on tax credits, policy changes and the IRS.
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Published: Feb 13, 2023 3 min read
Close-up of a 1040 Individual Income Tax Form
Money; Getty Images

If you received a relief payment or stimulus check from your state last year, good news: You don’t need to report it on your federal tax return. Probably.

After much deliberation, the IRS issued new guidance on Friday clarifying that residents of certain states who received tax rebates in 2022 do not need to report those rebates as income.

Last year, many states distributed these special relief payments to eligible residents to help them cope with rising prices and energy costs as well as expenses related to the pandemic. The IRS had previously advised taxpayers to wait to file their taxes this spring until it determined whether the state payments would be taxed at the federal level.