I recently got a mail from IRS questioning why my Tax Report 2017 did not report state tax refund received in 2017 as taxable income.
As I've been reviewing all the forms and instructions I can't see why indeed this refund shouldn't be taxable.
I reviewed this help article: https://ttlc.intuit.com/community/refunds/help/do-i-need-to-report-the-state-or-local-refund-i-got-l...
And I think all conditions requiring the tax refund to be reported as taxable income have been met:
* I did use Itemized Deductions (Schedule A) in Tax Report 2016,
* And I did claim state income taxes withheld in that Schedule A,
* And this did result in an increase to the Federal Tax refund I received in 2017.
I tried to amend TaxReport 2017: downloaded the tax file and the TurboTax 2017 Desktop app, and I see that correct refund amounts are in the system, but for some reason Line 10 in Form 1040 is 0 instead of the amount of state tax refunds...
I would greatly appreciate guidance on whether this tax refund is taxable, and if it is, how do I make TurboTax put it into Form 1040 ln 10 and update any dependent lines in the report accordingly.
Thank you, Critter,
I re-entered data for the state tax refunds in TurboTax Desktop app which then asked a few questions including whether or not I claimed state taxes in Itemized Deductions in TaxReport 2016 (I guess this was the question I've answered incorrectly when doing Tax Report 2017), and then the taxable refunds did show up in Form 1040 Line 10.
Thank you very much for help!!