Taxability of state income tax refund

Forum|Forum|1 year ago
January 20, 2025
2 replies
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I lived in two states in 2023. In 2024, I received a 2023 state income tax refund for State A and no refund for State B. I live in State B and no longer have to file a tax return in State A. Do I have to list my 2023 State A refund, received in 2024, on my 2024 federal return as 2024 income?

xmasbaby0

Employee

Your state refund is only taxable if you had itemized deductions on your 2023 federal return. If you used your standard deduction for 2023, then you do not have to enter a state 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.**

Mike9241

if your tax deduction on schedule A was limited to $10,000 ($5,000 MFS)

you need to see this webpage since some of the refund might not be taxable due to the limitaion.

if you used Turbotax in 2023 and use for 2024 it should handle the taxability of the refund properly

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf see page 84

in certain cases you'll need to use iRS PUB 525

https://www.irs.gov/forms-pubs/about-publication-525

this version is for 2023 so change the years from 2023 to 2024 start page 23) and then the worksheets 2 and 2a