State Stimulus Payments Aren't Taxable in 17 States – Here's Which Ones

Residents of 21 U.S. states received a stimulus check from their state governments in 2022. The money was either general welfare and disaster relief payments or pandemic-related tax refunds. Now that most people are starting to think about taxes, you may wonder if the state stimulus payment you received is taxable.

Do residents have to pay taxes in 2022 on the state stimulus payments that they received from the government. The short answer is "maybe." Keep reading for all the details and to see if you will owe taxes on your state stimulus payment.

If you live in one of 17 states that doled out general welfare and disaster relief payments, you’ll be happy to hear that you don’t have to claim those payments as income on your 2022 tax return. In a Feb. 10, 2023, press release, the IRS said it “will not challenge the treatment of these payments as excludable for federal income tax purposes.”

The states that issued payments that are tax-exempt include:

• Alaska - Residents received a $3,284 Permanent Fund Dividend, of which $662 was an Energy Relief payment that is exempt. You must still include $2,622 as taxable income on your 2022 return.

• California - To offset the high cost of gas and other goods, California issued refunds to its residents. The Middle Class Tax Refund was between $200 to $1,500, depending on the resident’s 2020 income and filing status.

• Colorado - Single taxpayers received a $750 refund, and joint-filing married couples received a $1,500 refund as part of the Colorado Cash Back program.

• Connecticut - Parents in the state were eligible to receive a Child Tax Rebate of $250 per child for up to three children if they met certain income thresholds.

• Delaware - Under the 2022 Delaware Relief Rebate Program, all adult residents got a one-time payment of $300 to help offset higher prices at the grocery store and gas pump.

• Florida - Low-income families with children received a one-time Pandemic Temporary Assistance for Needy Families (P-TANF) assistance payment of $450 per child.

• Hawaii - The state’s Act 115 Refund provided a one-time refund of either $100 or $300 based on their filing status on their 2021 return.

• Idaho - Idaho residents received two tax rebates in 2022. The Special Session rebate gave $300 to single filers ($600 to joint filers) or 10 percent of their 2020 state tax, whichever was greater. The other tax rebate gave every taxpayer and their dependents $75 or 12 percent of their 2020 state tax.

• Illinois - Residents here also received two tax rebates, an Individual Income Tax Rebate and Property Tax Rebate, but only one doesn’t have to be reported on your tax return. The IRS has not yet stated which of these rebates is reportable and which isn’t.

• Indiana - This state issued two refunds, Automatic Taxpayer Rebate #1 and #2, which gave residents a total of $325 for singles and $650 for married couples.

• Maine - About 858,000 Maine residents received $850 relief checks to help with increased costs due to pandemic-driven inflation.

• New Jersey - The ITIN Holders Direct Assistance Program in this state gave $500 to every resident with an Individual Taxpayer Identification Number, which is issued to people who don’t have a Social Security number. Recipients also have to meet specific income guidelines for the payment.

• New Mexico - Residents here received multiple rebates, even those who aren’t required to file taxes. All taxpayers received rebates of $500 for single filers and $1,000 for joint filers. Plus, single filers earning under $75,000 (or joint filers making under $150,000) received another $250 ($500 for married couples). New Mexico residents who don’t file income tax returns received $500 for singles with no dependents and $1,000 for married couples.

• New York - Like Illinois, New York residents got two tax credits – the Empire State child credit and earned income credit – but only one needs to be claimed on your 2022 return. The IRS has not provided further verification on which credit needs to be reported.

• Oregon - Residents who lived in the state for the last six months of 2020 and received the Earned Income Tax Credit on their 2020 tax return received a One-Time Assistance Payment of $600.

• Pennsylvania - Residents age 65 and older, people with disabilities, or widows age 50 and over were eligible to receive up to $1,657.50 under the state’s Property Tax/Rent Rebate Program. The amount received depended on the person's income and whether they were a renter or homeowner.

• Rhode Island - Families received child tax rebate payments of $250 per qualifying child for up to three children if they had an adjusted gross income of $100,000 or less ($200,000 or less for married couples filing jointly).

Taxpayers in Georgia, Massachusetts, South Carolina, and Virginia who received state stimulus payments must claim those payments on their 2022 tax return unless they meet certain requirements.

The payment doesn’t need to be claimed as income if:

• the payment is a refund on paid state taxes, and

• the recipient claimed the standard deduction, or

• the recipient itemized deductions but didn’t receive a tax benefit.