Just when you thought you were getting the hang of this whole rebate check thing, some states are adding more confusion to the mix by announcing that they'll be taxing the federal stimulus checks. Your rebate check won't be taxed on the federal level, but your state could decide to tax the checks as part of your personal income tax. Many states haven't reached a decision one way or another, and it's possible that they won't have any news in this regard until tax time next year when we're filing our 2008 taxes. A handful of states have already given their residents a heads up about what they can expect next year. To find out if your state has come to a taxing conclusion just read more.
New York won't be taxing the rebate checks because, as explained by NY Governor Eliot Spitzer, "During these challenging fiscal times, it is particularly important for all New Yorkers to know that they will retain the full amount of this rebate, and will not be taxed on these amounts next year.” Oregon, Iowa, and California have all followed suit and will not be taxing their residents on the stimulus rebate checks.
If you live in Alabama, it seems your state is planning on taxing the checks because its budget could use the $55 million it would receive from doing so. And if you're sitting on the edge of your taxpayer seat and can't wait for your state to make an announcement, Bankrate has a directory of every state's department of revenue along with phone numbers and you could try giving them a friendly call. You know, just to check in.
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Ugh...what a pain in the butt!!
1Is there a need for all of the taxing. It makes me so angry!
2I bet NJ would. We keep paying all these taxes and these people keep complaining that they're broke while they drive around in their BMWs...
3That is BS. If that is money that I had already paid in taxes and I am getting it returned, then that money has already been taxed. I know that this is not technically a tax return, but it is infact tax payer money being returned to them.
4Thank God I live in Texas...no state income tax!
5maybe i should move to texas! i wonder if i can 'reject' the tax rebate cheques?
6They tried this in NM the last time. Claimed that those taxpayers who had deducted their state income tax as an itemized item on Fed return had to include the rebate back into income on State return. Never did make sense tro me. I don't know how this played out because we don't itemize and haven't for years. Therefore this play didn't effect us.
7As a Floridian, I don't have to worry about that. No state tax for us, YAY!!!
8Yay for California.
But I might be moving to Boston by 2009, will that affect
anything?
9Yuck, what is up with that, Alabama?!
Yep, definitely one of those times where I'm happy to be living in a state without income tax (Florida). Because I'm sure they would want to do this too!
10Oh jeez...I can't keep all this stuff straight!
11That is ridiculous! They tax everything. Since i live in taxachusetts i am sure they will tax us.
12i bet nj will too lol and doesn't it just defeat the purpose of these rebates? we won't be stimulating the economy as much if we just have to give it back to the state!
13oh great. new jersey will SO tax them. bah.
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