South Carolina tax rebates might be taxed on the federal level this year.
Then again, they might not.
The IRS isn't sure just yet, but suggests people who got rebates wait to file their taxes until the matter is clarified.
South Carolinians were among millions of Americans from multiple states who received some type of tax rebate check last year - mostly to offer relief from economic hardship, including inflation.
The South Carolina Department of Revenue has already stated that the tax rebate would not be taxed by the state.
However in a recent statement, the IRS confirmed that it was still trying to clarify if tax rebates, like the one in South Carolina, would be taxable on the federal level.
"We are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers," the IRS states. "We expect to provide additional clarity for as many states and taxpayers as possible (this) week."
Given the uncertainty, the IRS recommends taxpayers wait for clarification on state payments rather than calling the agency. The IRS also does not recommend taxpayers amend an already filed 2022 return.
According to the Tax Foundation, South Carolina was one of 11 states that issued rebates to eligible taxpayers last year. The other states include California, Colorado, Delaware, Georgia, Hawaii, Idaho, Illinois, Maine, New Mexico and Virginia.
South Carolina lawmakers in June approved the parameters for a tax rebate of $1 billion for South Carolinians. Eligible taxpayers have received up to $800 by direct deposit or paper checks.
Nearly all of the $1 billion has been distributed. However, there are some eligible taxpayers who filed or will file their 2021 tax returns between Oct. 18 and Feb. 15 and will get their rebates in March, the SCDOR states.
