Does a previous years refund e

[barbarabrandenbu]

need to be counted as income?

[JulieCo · Accepted solution]

It depends.  

If the refund is a federal tax refund, it is not included as income.

If the refund is a STATE tax refund, you will need to include the previous year refund (from 2016) on your tax return as income.  Because if you itemized expenses last year (as opposed to taking the standard deduction), the taxes paid in 2016 were included as an itemized expense and reduced the amount of taxable income so your refund would need to be added back into income this year.

Therefore report the state tax refund and TurboTax will help you determine if it needs to be included in your taxable income for this year.

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