About 750,000 Arizona families were eligible for a Republican-backed tax credit related to children and dependents. But now the federal government wants a cut of that money.
The IRS says the Arizona Families Rebate is subject to federal income taxes. Eligible Arizonans received up to $750.
How much will be taken depends on many factors like how much an Arizonan received, and what federal tax bracket they are in.
The state is issuing a 1099-MISC form. Taxpayers will be able to access it at the end of the month.
While the rebate is exempt from state taxes, it may affect its calculations since federal adjusted gross incomes will be affected.
Senate President Warren Petersen has called on the state attorney general to fight the IRS’s decision.
More information on the rebate and the 1099-MISC formcan be found at the Arizona Department of Revenue website.
