New York
won't be taxing the rebate checks because, as explained by NY Governor Eliot Spitzer, "During these challenging fiscal times, it is particularly important for all New Yorkers to know that they will retain the full amount of this rebate, and will not be taxed on these amounts next year.”
Oregon,
Iowa, and
California have all followed suit and will not be taxing their residents on the stimulus rebate checks.
If you live in Alabama, it seems your state
is planning on taxing the checks because its budget could use the $55 million it would receive from doing so. And if you're sitting on the edge of your taxpayer seat and can't wait for your state to make an announcement,
Bankrate has a directory of every state's department of revenue along with phone numbers and you could try giving them a friendly call. You know, just to check in.