If your state refund did not affect your tax liability last year, then it is not income in this year and will not be on your tax return. Your state refund is only taxable if all of the following three items apply: You itemized deductions last year, instead of taking the standard deduction You claimed state and local income taxes (not general sales taxes) Claiming the deduction helped you increase your federal refund or lower your tax bill

Question

1099-G and not including the refund as reported income

Forum|Forum|4 years ago
February 19, 2022
2 replies
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LenaH

If your state refund did not affect your tax liability last year, then it is not income in this year and will not be on your tax return.

Your state refund is only taxable if all of the following three items apply:

You itemized deductions last year, instead of taking the standard deduction
You claimed state and local income taxes (not general sales taxes)
Claiming the deduction helped you increase your federal refund or lower your tax bill

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M

Mike029Author

Thank you. I did take the standard deduction. Based on your response, my previous year's state tax refund is tax free.

VolvoGirl

Employee

A State Tax Refund is taxable if you itemized deductions on that prior year's federal return and took a deduction for state income taxes instead of the sale tax. You got a deduction benefit for it so now you have to include it as income. If you took the standard deduction it is not taxable and you don't need to report it.

You need to check your 2020 1040 line 12 to see which deduction you took. How much is on line 12?