Lets see.....   the State government shorted every man, woman and child $1000.   So you think that the federal government should decide if this was a tax?   WE ARE NOT OWNED BY THE GOVERNMENT.  The people who counted  on this money, to pay for fuel or Christmas presents, or whatever....   they are too poor to even worry about federal income tax.   The rest of us will pay federal income tax on what remains of the PFDs.    The IRS will lose out this year....      I wonder how they would rule?   Greedy governments.   It was a tax that we do not have to report to the IRS, because we never received the income.   It was income (tax?) withheld by the State.