IRS gives new guidance on state tax rebate issue

the IRS now says most of us will not have to pay tax on our state tax rebate. With one exception. Earlier this week the IRS asked taxpayers from Massachusetts to wait to file until it could decide whether the state tax rebate that many of us received was considered taxable income. The state of course returned money to three million residents because of a budget surplus. So now the IRS is giving us the green light to file explaining that 90% of us here in Massachusetts won't have to report that rebate check as income. That's because most people claim the standard deduction. A tax expert tells WBZ though if you file with itemized deductions you will need to fill out another form and report the rebate on your federal return.

WBZ News 11pm, irs, taxes, tax rebate, boston news, wbz-tv