My 2015 state income tax return was intercepted by the IRS. Is it considered taxable income?

[jstdave]

It was for taxes owed to the IRS. I received a 1099-G for the amount intercepted. Turbo tax transferred that amount and says its taxable.

[Texas Roger · Accepted solution]

Yes it is taxable. You would have received it if it had not been used to offset taxes owed to the IRS.