IRS urges Massachusetts taxpayers to wait to file
CRANSTON. R.I. (WJAR) — Not so fast!
After urging taxpayers to file as early as possible, the IRS is now asking taxpayers in many states, including Massachusetts and Rhode Island, to wait.
This is going to be a big problem for a lot of folks locally -- especially Massachusetts residents because every taxpayer in the state got a refund last year, thanks to a rarely triggered state law that prompts the state to issue refunds if it collects too much money.
The IRS said it was hoping to provide some clarity on the issue this week, but it's Thursday and we're still waiting.
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Because we’re several weeks into filing season, the big question is: what happens if you already filed your return?
According to the Taxpayer Advocate Service -- an independent organization within the IRS that has already criticized the IRS for putting this problem on the backs of taxpayers and tax professionals -- early filers could run into several problems:
- If you reported that state refund as taxable, and the IRS determines it's not, you'll likely need to file an amended return. That means you'll need to waste more time and money, and you'll have to spend more time waiting for your refund.
- Conversely, if you did not report the state refund when you filed and the IRS determines the payment is taxable, you could be subject to additional taxes, interest, and potential penalties.
While it is frustrating to wait even longer to get your money, if you haven't filed yet, sit tight.
And if you have filed, sit tight.
Hopefully the IRS will be providing additional guidance over the next few days.