Amend return for property tax refund?

[supernat]

I filed last year's taxes itemized with a line item for property taxes.  Later in the year, I received about $600 in property tax refund for claiming homestead exemption.  Do I need to amend my tax return to reflect the change in taxes?

[Mike9241 · Accepted solution]

if you got a refund in the same year for an amount for which you got a tax deduction, you need to amend if that would increase your tax bill (you would owe on the amended return).   the itemized deduction limit for taxes is $10,000, so it's possible the refund will have no effect on your federal income taxes.  can't  say if there would be an effect on your state income taxes (assuming you have them)

[supernat]

Thanks, I wasn't even aware of the 10K limit.  After doing a bit of research, that appears to be combined sales tax and property tax (and income tax if applicable).  We don't have state income tax here.  I guess I better amend just to be safe, but pretty sure I may be at that 10K limit when combining property and the std sales tax deduction.  Thanks!

[JillS56]

A homestead exemption is not a property tax credit and typically does not require you to amend your return.   Before I can say for certain, what State do you reside?   

Many states offer homestead credits to residents who meet certain criteria.  The homestead credit is based on the assessed value of your home, the amount of your property tax, and your income.  This is not a refund of taxes it is a credit you receive as a homeowner if you meet the criteria.

[supernat]

I live in Texas.  I didn't receive much of a real explanation.  I had however filed for a homestead exemption, because I didn't have it the prior year due to ignorance on my part, so it was accepted and applied to the previous year as well.  The checks they sent to me just said "re-calculated refund".

[ThomasM125]

The homestead exemption is associated with your real property tax which is an allowable state tax deduction as an itemized deduction.

It is similar to a state income tax refund. You can deduct the tax paid in the year you pay it. If you get a refund in the next year, you can enter it as income on your federal return in the year it is refunded.

You should report it, assuming you deducted it in a previous year, in the Other Common Income section, and then State and Local Tax Refunds.