Question

Income

I received a partial refund for merchandise purchased in a prior year which had been overpriced. Is this considered income?

A refund is only income if that cost was deducted in a prior year.

If you purchased Office Supplies and deducted that cost as a Business expense, yes, the refund needs to be added back.

If you purchase school supplies for your kids and get a refund, no, that is irrelevant.

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