IRS: New Mexico rebates not subject to federal taxation

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Income tax rebates and relief payments distributed by New Mexico in 2022 will not be subject to federal taxation, according to the IRS.

The New Mexico Taxation and Revenue Department had already made clear the payments were not subject to state taxation. But the IRS last week said it was still reviewing whether rebates would be subject to federal taxation and advised taxpayers in about 20 states to delay filing until it had made a decision.

“This is great news. Now, taxpayers and preparers can move forward with filing their 2022 income tax returns,” said New Mexico Taxation and Revenue Secretary Stephanie Schardin Clarke.

Taxation and Revenue urges taxpayers to file as early as possible to expedite refunds they may be expecting and lessen the chance that they could become the victim of a fraudulent return filed in their name.

If you already filed your taxes you don’t have to make any changes, so don’t file an amendment.