The 11th-hour guidance comes a week after the IRS told recipients to delay filing their tax returns.
Courtney Alev, a consumer financial advocate at Credit Karma, offers tips for preparing and filing your taxes.
"The IRS appreciates the patience of taxpayers, tax professionals, software companies and state tax administrators as the IRS and Treasury worked to resolve this unique and complex situation," the IRS said Friday evening in a statement. In addition, many taxpayers in Georgia, Massachusetts, South Carolina and Virginia also avoid federal taxes on state payments if they meet certain requirements, the IRS said.In California, most residents got a "middle class tax refund" last year, a payment of up to $1,050 depending on their income, filing status and whether they had children. The Democratic-controlled state Legislature approved the payments to help offset record high gas prices, which peaked at a high of $6.
Maine was another example of states where the IRS stance had created confusion. More than 100,000 tax returns already had been filed as of Thursday, many of them submitted before the IRS urged residents to delay filing their returns.