Gov. Tim Walz (D-MN) called the Internal Revenue Service's decision to make the state's one-time tax rebates, sent out earlier this year, federally taxable income "bulls***."

The Minnesota Democrat went after the Biden administration's decision to tax the rebates, which ranged from $260 to up to $1,300 per eligible taxpayer while discussing the state budget surplus forecast earlier this week.

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"Bulls***," Walz said at a press conference on Wednesday. "I don't know. It's the IRS. I will tell you this: I have been on the phone, not much more judicious than that slip there, to let them know."

The rebates will be federally taxed but will not be taxed by the state for tax year 2023. The state missed the COVID-19-era exemption to being taxed on the rebates by 15 days because the federal coronavirus emergency ended in May. Nearly 2.1 million rebates were sent out by the state earlier this year, and those who got the rebates will get a form from the state to fill out their federal taxes for 2023.

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"We'll send Form 1099-MISC to all rebate recipients to use when filing U.S. individual income tax returns for 2023. If you include this payment in federal adjusted gross income, subtract it from Minnesota taxable income on line 33 of Schedule M1M on your state return," the Minnesota Department of Revenue said on its website about the rebate.

The rebates were issued beginning on Aug. 16, with the final checks being sent out on Sept. 27. The state says that it began reissuing uncashed and expired checks on Nov. 13, with the reissued checks being valid for 60 days.