I received a real estate tax refund in 2025 for RE taxes paid from 2023-25, due to filing and receiving 100% service disability. Do I need to file an amended return?

[jwpeabody08]

This situation will not change my over all taxes owed, since my state taxes paid exceed the total SALT limitation of $10,000 for those tax years.

[DoninGA]

Did you use the Standard Deduction or the Itemized Deduction for tax years 2023-2025?  If you used the Standard Deduction you do not report the refund of the RE taxes on your 2025 tax return.

[MindyB]

No, you do not need to file any amended returns. Since your state and local tax (SALT) payments remained above the $10,000 cap even after accounting for this refund, you do not need to file an amended return for the prior years. 

Under the tax benefit rule, a refund is only reportable as income in the year you receive it, in this case, 2025, if the original deduction actually lowered your federal tax bill. Because your other state taxes already hit the $10,000 limit, the specific real estate taxes that were refunded didn't provide any extra tax savings, meaning the refund is not considered taxable income.