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February 19, 2023
Question

1099 Misc income paid in 2022 but received in my bank 2023. What tax year do i claim it?

  • February 19, 2023
  • 1 reply
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I received rental income from the state of VT for a tenant for money owed in 2022 but it was electronically received by my bank on 1/4/2023.

Do I claim that as income in 2022 as their 1099 will say or include it in my 2023 taxes because I received it in 2023?

    1 reply

    February 19, 2023

    You should report the income for the year it was shown on Form 1099-MISC. The income was considered paid to you in 2022, except that your bank didn't post it to your account until after January 1st. A valid check that you received or that was made available to you before the end of the tax year is considered income constructively received in that year, even if you do not cash the check or deposit it to your account until the next year.

     

    The constructive receipt of income doctrine has long been a part of income tax law and procedure. Under this doctrine, a taxpayer will be subject to tax upon an item of income if he has an unrestricted right to determine when such an item of income should be paid. Income is constructively received in the year in which, although not actually received, it was made available so that the taxpayer could actually receive it at any time if notice of intention to receive it has been given.

     

    See here for more information on this topic from the IRS.

     

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