Delaware’s House lawmakers voted Thursday to take the first step towards exempting last year’s $300 relief rebate checks from federal income taxes.
Lawmakers created the rebates to return roughly $230 million of the state’s 2022 budget surplus to Delaware residents recovering from the pandemic and coping with rising inflation.
Those checks are exempt from state income taxes. To make them exempt from federal taxes, House Majority Leader Valerie Longhurst introduced legislation Thursday seeking to classify the rebates as qualified relief payments. That type of payment — relief provided to the public after federal declared disasters — is tax-exempt under IRS code.
The bill passed unanimously in the House and is expected to clear the Senate. But Longhurst notes the IRS has the last word.
“The IRS will make the final decisions about whether the payments qualify as such under the internal revenue code," she said. "All we’re doing is making sure that can happen.”
More than 700,000 Delawareans received and cashed their rebate checks, which were available to residents whether or not they filed income taxes in 2020.
