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Do I Need to File an Estate Return for a Deceased Person that received a State Tax refund?

Forum|Forum|3 years ago
April 8, 2023
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My wife's aunt received a state refund (over $600) in 2022 for her 2021 tax return. I assume this goes to her Estate and I, as her Executor need to file a return for the Estate? Or, does that refund have to be claimed as income at all, by anyone? It's the only thing that will be on an Estate return, for what it's worth. I don't know what other details may be necessary for this post. Thanks!

Best answer by Anonymous_

@Lonestar wrote:

....does that refund have to be claimed as income at all, by anyone?

A state refund would not be taxable at the federal (or state) level unless there was a tax benefit.

If you have access to your wife's aunt's 2021 tax return (1040), you do not need to bother reporting the state refund as income if she did not itemize deductions on Schedule A.

A

Anonymous_Answer

Employee

@Lonestar wrote:

....does that refund have to be claimed as income at all, by anyone?

A state refund would not be taxable at the federal (or state) level unless there was a tax benefit.

If you have access to your wife's aunt's 2021 tax return (1040), you do not need to bother reporting the state refund as income if she did not itemize deductions on Schedule A.

LonestarAuthor

Thanks! Well, I did her taxes for 2021 of course, as she was deceased. Obviously, I took the Standard deduction because her itemized deductions were only ~$900+. What's weird is that instead of it being $12,250 as it appears it should be on Line 12a, it's showing $14,250. I did it all in TurboTax, so I assume there is an additional $2000 thrown in, possibly for 'disaster relief' (COVID or something) in California... (?).

So, as I understand it, if I had itemized and included the state tax, it could haveld have reduced her taxes and she would have benefited. Therefore, I would need to file the tax refund... which may or may not create a taxable situation. Please advise. Thanks!

And furthermore, what about CA state taxes. Does that full under the same rule or would that be separate state income I need to deal with on a State Return?