It depends. If all three of the following are true, your refund counts as taxable income: 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 billEven 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. Report last year’s state or local tax refund, and we’ll figure out if it’s taxable or not.

Question

Do I have to claim state refund in Illinois on my federal taxes?

Forum|Forum|5 years ago
February 22, 2021
1 reply
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TurboTax Deluxe Online

A

AlanT222

It depends.

If all three of the following are true, your refund counts as taxable income:

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.

Report last year’s state or local tax refund, and we’ll figure out if it’s taxable or not.

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