Lion EA Posted March 8, 2023 Report Share Posted March 8, 2023 Colorado $750 to all individual taxpayers. Federal taxable? Other Income or...? Nontaxable? Are you entering it and then backing it out? Using what lines? CO taxable? My first of only two CO clients. Quote Link to comment Share on other sites More sharing options...
Slippery Pencil Posted March 9, 2023 Report Share Posted March 9, 2023 Recent irs guidance states these payments are not taxable. CO starts w/ federal taxable income. Is there a CO add back for this? Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 9, 2023 Author Report Share Posted March 9, 2023 I see the IRS guidance re CO Cashback. Do we leave these state payments off the federal return entirely, or report them and them back them off/zero them out on another line? If the latter, where? From what I read from CO, they do NOT add it back on the CO return. (And, no subtracting, now that the IRS has spoken.) By the way, the next CO payment is happening via the 2022 tax return instead of the 2021 method via a check in the mail. I don't want to think about if we'll have to divide the next refund into income tax refund vs CO Cashback on their 2023 federal tax returns, etc.! 1 Quote Link to comment Share on other sites More sharing options...
Slippery Pencil Posted March 10, 2023 Report Share Posted March 10, 2023 Was a 1099 issued? If yes, do you believe the irs' right hand knows what it's left hand is doing? If yes, leave it off the return. If no, add as other income, deduct as other adjustment. 1 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 10, 2023 Author Report Share Posted March 10, 2023 This first CO client claims she got no 1099 for the $750. She didn't itemize, so a response will be simple of she gets an IRS letter. By the way, the CO check with stub had a cover letter that sends you to a web page that states, "No. The Colorado Cash Back refund is not taxable." As it's a Colorado.gov web site, they certainly should be qualified to answer for taxability on the CO return. I'm surprised they didn't give the standard, "Ask your tax preparer" answer for federal taxability. I do NOT believe the IRS's right hand knows what it's left hand is doing. 2 Quote Link to comment Share on other sites More sharing options...
Slippery Pencil Posted March 10, 2023 Report Share Posted March 10, 2023 Non-taxable and no 1099 issued. Leave off return. My one CO client didn't include a 1099 so I'm assuming she didn't receive one. She did mention it in an email a month ago and she included it on her summary sheet. She's good at giving me stuff, if she received a 1099 she'd have given it to me. 3 Quote Link to comment Share on other sites More sharing options...
mwrightea Posted March 11, 2023 Report Share Posted March 11, 2023 The $750.00 Colorado refund is not taxable for the federal or state and no 1099G will be issued. This was a Tabor ( Taxpayer Bill of Rights) refund. 2 Quote Link to comment Share on other sites More sharing options...
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