LOS ANGELES — Three months after California started issuing Middle Class Tax Refund checks to 23 million state residents, the Internal Revenue Service is encouraging Californians to delay filing their taxes while it determines whether the payments are taxable.
“We are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers,” the IRS said in a statement Friday. “There are a variety of state programs that distributed these payments in 2022, and the rules surrounding them are complex.”
Between October and January, California issued payments of $200 to $1,050 to individuals who paid 2020 taxes in California. The move was inspired by last year’s record-high gas prices, which prompted the state legislature to approve what Gov. Gavin Newsom called “the largest state tax refund in American history.”
Issued through the California Franchise Tax Board, the state doled out $9.5 billion in refunds. The IRS says it expects “to provide additional clarity for as many states and taxpayers as possible” this week.