DAVENPORT, Iowa — Tax season this year might be a little more hectic than usual. That's because new guidance from the Internal Revenue Service (IRS) calls for some tax filers to wait to file their taxes.
It stems from a special one-time tax credit or tax rebate that up to 22 states, including Illinois, issued last year. The IRS says it doesn't know if those tax breaks are taxable or not just yet because each state has its own tax code.
Davenport-based Boss Tax and Accounting Services founder Latisha Collier says this new guidance will likely affect a lot of people.
"Most people that are looking for refunds would have filed, usually by the second or third week of February," Collier said.
In Illinois, qualifying residents received a one-time payment of up to $700 from the Illinois Family Relief Plan.
But on Feb. 3, the IRS posted on its website telling some people who received similar payments to withhold on filing until more information could be provided.
"The IRS is aware of questions involving special tax refunds or payments made by states in 2022; we are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers. There are a variety of state programs that distributed these payments in 2022 and the rules surrounding them are complex. We expect to provide additional clarity for as many states and taxpayers as possible next week," a post on IRS.gov detailed.
But this new guidance is affecting not just taxpayers nationwide, but also tax accountants — some of whom will have to eat the cost of submitting an amendment to some already submitted 2023 filings.
"I have to look at [it like this]. Do I want to do it as a courtesy amendment and not charge them extra to do their return?" Collier said. "And I'd be looking at losing out on money as well, but I also want to provide excellent customer service to my clients."
She says this information should have come sooner, not more than two weeks after tax season had started.
"Our clients look to us for protection and for help and advice and you know if something comes out at the last minute, it's frustrating to them as well."
The deadline to file this year is April 18. Any updates will come from IRS.gov.
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