Question

State tax refund is not taxable

Forum|Forum|1 year ago
February 19, 2025
1 reply
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Hello,

I itemized my deductions in 2023 and received state refund for california. Now I followed the steps for TurboTax but it shows that the state refund is not taxable.

Is that expected?

Some info about myself is that I am an employee with W2 and I dont have a business. I also have a house

And what are the cases that the state refund is not taxable despite itemization deduction?

X

xmasbaby0

Employee

IS MY 2023 STATE OR LOCAL REFUND TAXABLE?

If you used standard deduction for your 2023 tax return, you do not have to enter a state or local tax refund you received in 2024. If you itemized deductions then your state or local refund that you claimed on the 2023 return----and received in 2024---must be entered as taxable income on your 2024 return. If you are not sure if you itemized for 2023, look at your 2023 Form 1040 line 12. Do you see the standard deduction amount or something else?

2023 STANDARD DEDUCTION AMOUNTS

SINGLE $13,850 (65 or older/legally blind + $1850)

MARRIED FILING SEPARATELY $13,850 (65 or older/legally blind + $1500)

MARRIED FILING JOINTLY $27,700 (65+/legally blind) ) + $1500 per spouse

HEAD OF HOUSEHOLD $20,800 (65 or older/blind) + $1850)

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

T

T K12Author

I did itemize my deduction in 2023 but I followed the steps on turbotax and it showed that the state refund is not taxable.

Why that would happen?

M

MayaD

Taxpayers who itemize their deductions on their federal income tax returns and receive a state tax refund must include the refund in income only if they deducted the state tax paid. Because of the $10,000 limit on itemized deductions for state income and property taxes, some itemizers are not able to deduct all of the state taxes they paid and do not need to include a refund in income.

When you enter your information, TurboTax will automatically calculate the correct amount of taxable state refund if you have any.

For more information please check: Is My State Tax Refund Taxable?

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