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N
nhzhnd
February 24, 2021
Question

Is my state refund that I received last year being counted as income this year?

  • February 24, 2021
  • 1 reply
  • 0 views
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1 reply

E
ErnieS0
February 24, 2021

It depends. A state refund is taxable if all three of the following are true:

  • 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

Even when your refund is taxable, it may not be the entire amount. It depends on how much the deduction affected your refund or tax bill. Just answer a few simple questions about last year’s refund, and we’ll calculate the taxable amount for you.

 

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