Hi, I file my taxes through Turbotax every year. Today I received a 1099-G form from the state with the amount $XXX mentioned in Box2. Request assistance.

Forum|Forum|1 year ago
January 16, 2025
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xmasbaby0

Employee

Did you receive unemployment benefits? A state tax refund?

**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.**

DoninGA

Employee

To enter a state or local tax refund (Form 1099-G) -

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Other Common Income
On Refunds Received for State/Local Tax Returns, click the start or update button

Or enter state refunds in the Search box located in the upper right of the program screen. Click on Jump to state refunds

VolvoGirl

Employee

1099G box 2 is for a state refund you got last year. 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 sales 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. Check your 1040 line 12 to see which deduction you took.

Taxtaxtax681Author

Thank you, Checked 1040 Line 12, and it is Itemized. What is the next step? How should I proceed?

SteamTrain

Employee

When you go thru the entries on the Wages&Incoem page in TurboTax, there is a section for "1099-MISC and Other Common Income" in that section there is a subsection for State Tax Refunds....you go in there to make your entry of that state refund.

Whether any, or all of it ends up getting posted as income on your final Federal tax return, will depend on whether your state income taxes + Property taxes, were limited to the $10,000 SALT limit last year. If you transferred-in your 2023 tax file into 2024 at the start of your preparations, the basic info may already be pre-populated for you....but if this is the first time you used TTX, then you may need some of the $$ details from your 2023 filing to establish whether that state refund actually gets added as 2024 Federal income...or not.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*