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Important Tax Updates and Information -Early Filers Amend Returns & Estate Tax Update


IRS Suggests Some Early Filers

Amend Their Returns

The Internal Revenue Service stated Tuesday that taxpayers who filed their federal income taxes early this year and reported state tax refunds they received in 2022 as taxable income should consider filing an amended return.

In early February, the IRS urged taxpayers to hold off on filing their returns after questions arose about the taxability of refunds and rebates provided by California and other states last year as a way to help taxpayers deal with inflation and other issues. The agency promised to provide guidance within a week's time and soon announced that for most of the 21 states affected, the special state payments and rebates wouldn't need to be included in income (see story).

However, those people who filed early in tax season and included the money in their income for 2022 may now need to file an amended return to get back the taxes they paid on what the IRS has determined are tax-free payments.

On Feb. 10, the IRS provided details clarifying the federal tax status involving special payments made to taxpayers by 21 states in 2022. During a review, it determined that in the interest of sound tax administration and other factors, taxpayers in many states did not need to report these payments on their 2022 tax returns.

Consequently, the IRS will not challenge the taxability of state payments related to general welfare and disaster relief. That means people in the following states don't need to report these state payments on their 2022 tax return: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. Alaska is in this group as well, but the determination applies only to the special supplemental Energy Relief Payment received. Taxpayers can view a list of states and the federal tax treatment of their special state refunds or rebates on this online chart. Many taxpayers in Georgia, Massachusetts, South Carolina and Virginia won't need to include special state 2022 tax refunds as income for federal tax purposes if they meet certain requirements, the IRS added. For these individuals, state payments won't be included for federal tax purposes if the payment is a refund of state taxes paid and the recipient either claimed the standard deduction for tax year 2022 or itemized their tax year 2022 deductions but did not receive a tax benefit. Taxpayers who filed before Feb. 10 in these areas and meet these requirements (or their tax preparers) should check their tax return to make sure whether they paid tax on a state refund before filing an amended return. If an amended return is needed, contact a Succentrix Business Advisor to assist. Taxpayers can also submit a paper version of the Form 1040-X, "Amended U.S Individual Income Tax Return" and receive a paper check, but direct deposit isn't available for amended returns submitted on paper.


Inside The Latest Attempt to Kill the Estate Tax

Republican members of the Senate, have recently reintroduced proposed legislation, the Death Tax Repeal Act of 2023, that would abolish federal estate taxes. According to its sponsors, the bill is meant to ease federal taxes on family farms and family-run businesses and other entities after the death of their owners. The bill follows the Tax Cuts and Jobs Act of 2017, introduced by Sen. Thune, which doubled individual estate and gift tax exemptions for family-owned businesses under $10 million.


Taxpayers Help Guide

The filing and payment deadline for most 2022 federal tax returns has arrived. Below are links to resources that can help.

Taxpayers who need more time can request an extension. Taxpayers can request an extension of time to file to avoid a failure to file penalty, but they still need to pay their taxes or risk a penalty for failing to pay. An extension gives taxpayers until Oct. 16, 2023, to file their 2022 tax return. Contact a Succentrix Business Advisor to assist with filing your request for a tax extension today!



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Cohn, Michael. “IRS Suggests Some Early Filers Amend Their Returns.” Accounting Today, Accounting Today, 12 Apr. 2023,

“State Payments.” Internal Revenue Service,


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