Minnesota’s Democratic Governor Tim Walz called the federal government’s decision to tax those in his state who received rebate checks this year “bullsh*t” on Wednesday.
According to MPR News, the IRS will be taking between $26 and $286 from the state’s fall rebate recipients, depending on the size of the initial payout a household received.
Other states’ pandemic-era checks were sent tax-free, but the Minnesota Department of Revenue could not convince the IRS to treat its checks similarly.
“The rebates were $260 per person subject to income caps, with a qualifying household eligible for up to $1,300 if a couple had three or more dependents. The tax hit will also depend on a filer’s overall income this year,” MPR News explains. “From a broader perspective, it means that $100 million or more of the $1 billion overall rebate pot will wind up in federal coffers.”
It’s “bullsh*t,” Walz said during a news conference about the state’s 2024 budget surplus forecast.
“I don’t know,” the governor said. “It’s the IRS. I will tell you this: I have been on the phone, not much more judicious than that slip there, to let them know.”
“I spoke to the president’s chief of staff [Jeff Zients] yesterday,” Walz said, “when this became clear.”
“Look, Minnesota is being treated unfairly in this,” he stated.
Minnesota Gov. Tim Walz (DFL) vents as a reporter raises that the IRS is taxing Minnesota’s tax rebate checks as income:
“Ah, bullshit.” pic.twitter.com/Oe4j6Xjkwk
— Heartland Signal (@HeartlandSignal) December 6, 2023
The state missed an IRS cutoff by 15 days to qualify for the tax-free status.
Walz called the date “arbitrary.”
“They picked an arbitrary date to end the emergency, on May 11th,” Walz said. “The legislature did not get finished and sign them over until the 26th. So we missed by 15 days.”
“Every other state was afforded this,” he continued. “And they say, ‘Well, we’ve got to have a red line in the sand.'”
“I am deeply disappointed,” the governor said. “And I think the idea, if they even think about downplaying that it’s 26 dollars, I will have even harsher words than I started with, because it’s simply — it’s just not right.”
Revenue Commissioner Paul Marquart echoed Walz’s sentiments.
“It’s certainly disappointing. But ultimately, the IRS has the final determination on federal taxability,” he said, according to MPR News. “Of course, these are not taxable on the state level.”
Marquart’s staff estimates that 18 percent of rebate recipients, or about 390,000 Minnesotans, don’t have a federal tax liability and won’t owe anything, he said.
“But the remainder of the 2.1 million recipients will be affected,” MPR reports. “Revenue Department estimates are that filers could pay anywhere from 10 percent to 22 percent of their rebate in federal taxes. A recipient of a $260 payment could owe between $26 and $57; for the household that got $1,300, the federal tax bill could range from $130 to $286.”
“Marquart’s agency will begin sending out 1099 tax forms this week reflecting the rebate amount for each recipient,” the outlet says. “They will have to claim that as income when filing federal returns for 2023. The instructions will remind taxpayers to subtract the amount from their adjusted gross income on Minnesota returns to avoid state taxation.”
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Melissa Fine is the former executive editor of Casino Player, Strictly Slots, and Poker
Digest magazines. She is a UCLA graduate, news junkie, and dedicated Stargate SG-
1 fan. Melissa currently lives with her dog and two cats in a tiny town in the Sierra
Nevada foothills.
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