The tax rebate received in late 2023 was based on income on the 2021 tax return. They call it a 2021 tax rebate. The money was received in 2023 and is taxable on the federal return in 2023. However it is titled "2021 tax rebate". This confused me terribly as well. And I am a CPA. I still don't think it is correct that the federal government taxes it, as it is a state tax refund. If one didn't itemize and receive a benefit from the taxes paid, it shouldn't be taxable when refunded. But we have to go with the IRS rules, no matter how crazy they are.
