Will You Pay Taxes on Your State Stimulus Check?

Millions of people who received state "stimulus" checks last year have wondered whether the money will be taxed.

dollar bill puzzle with missing piece
(Image credit: Getty Images)

State "stimulus" checks (also called inflation relief payments or in some cases, state tax rebates) have been a huge topic in the past year. And, after millions of people in twenty-one different states received state payments or state stimulus checks in varying amounts and under various programs, many wondered if they would have to pay taxes on that money. Well, the IRS has offered an answer. 

The IRS had initially asked taxpayers who had received the special payments, to wait to file their 2022 federal income tax returns so that the agency could decide whether the payments would be treated as taxable income. But after a review, the IRS has said that it won’t challenge the taxability of most of the special state payments.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Kelley R. Taylor
Senior Tax Editor, Kiplinger.com

As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.