As tax season looms, bipartisan voices in Arizona are advocating for a reversal of the IRS decision to categorize the state’s family tax rebate program as taxable income on federal returns. The IRS ruling affects recipients of the 2023 Arizona Families Tax Rebate Program, initiated under Gov. Katie Hobbs wherein over 700,000 families were eligible for rebates of $250 per dependent under 17 and $100 per dependent over 17, with a $750 cap.
Concerns Raised Over Taxable Treatment of Arizona Families Tax Rebate Program
Arizona Attorney General Kris Mayes, a Democrat, and State Senate President Warren Petersen, a Republican, jointly appeal to IRS Commissioner Daniel Werfel to reconsider the taxable status of the rebates. Mayes emphasizes the urgency stating that legal avenues will be explored to protect Arizona taxpayers if the decision is not promptly reversed.
Petersen questions the IRS rationale, highlighting that over a dozen states with similar legislation did not face taxation on their rebates. The bipartisan effort seeks to alleviate the burden on Arizona families with Petersen expressing gratitude for the collaboration with U.S. Sen. Kyrsten Sinema’s office in bringing the matter to the forefront.
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State Leaders Unite Against IRS Decision for Tax Rebate Program
Arizona Department of Revenue advises taxpayers to check 1099-MISC forms online post-January 31 for rebate details. Despite the tax rebates being exempt from state income tax the push by Mayes and Petersen aims to make them non-taxable federally simplifying the filing process for citizens.
With tax season looming the urgency intensifies, and leaders stress the illogical nature of taxing a tax rebate. The bipartisan effort underscores a shared commitment to shielding Arizona families from unnecessary financial burdens during an already challenging time.