Are IRS Refunds Ever Taxed by States

Forum|Forum|1 year ago
January 17, 2025
2 replies
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Are federal refunds counted as taxable income in any states?

Not A Product Question

xmasbaby0

Employee

There are a few states in which your federal refund might be taxed:

Alabama, Iowa. Missouri, Montana, and Oregon. I

**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.**

Boombaby99Author

I don't live in any of those states. That must be why I've never heard of that. I've been in PA most of my life.

SteamTrain

Employee

Possibly...depends on the state.

There are a couple of states (3 or 4...or??) that allow a state income deduction for taxes paid to the IRS in one year, and if you get a IRS refund, then it becomes a State income item the next.

Please, always indicate what state you are dealing with...we don't know in this public forum unless you tell us.

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

Boombaby99Author

I was just curious if any states ever taxed it. I've never heard of such a thing before until I read online that sometimes you have to report your federal refund on your state taxes and was curious when this would ever happen to someone. This was a general site, not state specific.

hgsmoth

California is one of those states. They send you a 1099-G for any state refund you get. So you keep getting taxed on income you haven't made for years and the 1099 costs you more to file. It's just awful.