Why is 2022 state refund showing on my 2023 return?

[jazizgutierrez]

Does this affect my refund?

[VolvoGirl]

Exactly where is it showing?  A State Tax Refund is taxable on your federal return if you itemized deductions on that prior year's federal return and took a deduction for state income taxes instead of the sale tax.  You got a deduction benefit for it so now you have to include it as income. If you took the standard deduction it is not taxable and you don't need to report it.

If it is taxable it will be on Schedule 1 line 1 which goes to 1040 line 8.  

[rjs]

Where is your 2022 state refund on your 2023 tax return? Is it on Schedule 1 line 1? (Look at the actual tax forms, not a summary screen in TurboTax.) If that's where it is, it's there because you itemized deductions on your 2022 tax return, and your deduction for state income tax reduced your 2022 federal tax. But in 2023 you got back part of the 2022 state tax that you deducted, so you have to report it as income on your 2023 federal return.

If you see the state tax on the 2023 Income Summary in TurboTax, but it's not on Schedule 1 line 1, that just means that it was entered in TurboTax, but it is not actually on your 2023 tax return. That would happen if you did not itemized deductions on your 2022 tax return. TurboTax knows you got the state refund, but it also knows that the refund is not taxable.

[jazizgutierrez]

I do not itemize on my taxes. I just didn't understand why it has 2022 on there when I didn't enter it in on my 2023 return. Is this a mistake or glitch? Does this affect my tax return refund?

[VolvoGirl]

Thats ok.  It only affects your return if it shows up on 1040 line 8.  If you didn't itemize you don't need to enter it.  Did you get a 1099G for it?   

[rjs]

@jazizgutierrez 

It's not a mistake or a glitch. TurboTax carried over the state refund from 2022.

You had a screen in TurboTax that asked you if you took the standard deduction in 2022 or itemized deductions in 2022. If you correctly answered that you took the standard deduction, then the state refund is not on your tax return and it does not affect your refund, even though it's on the Income Summary screen in TurboTax.

Look at the actual tax forms, not the TurboTax screen. If Schedule 1 line 1 is zero or blank, or if you do not have Schedule 1 in your tax return, then the state refund is not on your tax return and it does not affect your refund.

How do I preview my TurboTax Online return before filing?