💲The payments were received between January and March

💲The IRS initially said the payment would be not be taxed

💲The state is not taxing the payment

The money given to Maine residents by the state to help pay for high energy costs will be taxed by the IRS in a surprise reversal of its original position.

Nearly a million residents accepted the $450 per person Winter Energy payment, which was part of Governor Janet Mills’ Emergency Energy Relief Plan when energy costs were at record levels. The payment was never subject to state income tax, and the IRS initially agreed as recently as August. However, the feds changed their mind.

"However, in a recent phone call, IRS representatives informed Maine Revenue Service representatives that the $450 Winter Energy Relief Payments would be subject to federal tax," read a statement from the governor's office.

The IRS will not put its decision in writing, according to Mills.

According to a letter from the Department of Administrative and Financial Services Commissioner Kirsten Figueroa obtained by WGME, the funds were not exempt disaster relief payments, as they were given out too late in the pandemic despite a national public emergency still in effect at the time.

Mills told WGME the IRS had pulled the rug out from 880,000 residents who took the help. She intends to write to the IRS to express its objection to reversal, and to question this new determination.

The governor said the payments could be anywhere from $50 to $200, depending on income and filing status.

Contact reporter Dan Alexander at Dan.Alexander@townsquaremedia.com or via X (Twitter) @DanAlexanderNH

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