Tuesday, March 07, 2006

Tax Oops

You probably don't want to hear this, but if you missed the various news stories, you do need to know. According to a story in the Santa Fe New Mexican on February 24th, the IRS expects us to pay income tax on the state energy rebate that we received last fall. If you've already filed your Federal income tax, you are expected to amend your return with a 1040X form (available from the IRS website). The New Mexico Taxation and Revenue site confirms this, and includes the information that you may enter the rebate amount as 'Other income' on line 21 on Form 1040; as 'unemployment compensation' on line 3 of Form 1040EZ; or as 'unemployment compensation' on line 13 on Form 1040A. Stories the following day said the IRS ruling might be challenged.

The March 4 Albuquerque Journal had a couple more stories (sorry, they're not available for free online), including another story which said accountants are still in doubt whether the IRS is correct to rule that the rebates are taxable.

If you don't remember how much your rebate check was, you're certainly not alone... Perhaps you can use the rebate schedule on the New Mexico Taxation and Revenue Department website to figure it out.

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