The IRS says the rebates Arizona families received last fall are taxable, taking a bite out of the relief state lawmakers sent to roughly 750,000 households.Only the IRS will levy the tax. There is no state tax, the state Department of Revenue said. Taxpayers should deduct the rebate from their federally adjusted gross income when filing their Arizona tax form, the agency said.The rebates ranged from $100 to $750 depending on the number of children in a family and their age.A $750 rebate could carry a tax of $165 for filers in the 22% federal tax bracket. That bracket applies to married couples who file jointly and earned between $89,451 and $190,750 in 2023, according to IRS guidelines.The rebate was a key initiative of the Legislature’s Freedom Caucus and was approved as part of a budget deal with Gov. Katie Hobbs. Checks went out starting in late October. The move was intended to provide relief from inflation and give taxpayers back some of their own money, proponents said.The state revenue agency said it is sending guidance to rebate recipients to help them as tax filing begins. That includes where to find the 1099-MISC form that must be used to report the rebate amount.The form …
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