We currently MFS and itemize deductions. For 2018, we will MFJ and take the standard deduction. Are 2017 state refunds applied to 2018 taxes federally taxable?

Forum|Forum|7 years ago
June 5, 2019
3 replies
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My thinking is that we will not get a 1099 for these funds - they just 'pass through' the year and thus are not income.

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Best answer by Lisa995

If you itemized in the prior year and took a deduction for state taxes paid, then the state refunds you received do get included as income the current year.

rjs

Level 15

You WILL get a 1099-G for the refunds. They don't "just pass through." Applying the 2017 refunds to your 2018 tax is the same as if you received the refunds and then wrote a check to the state for your 2018 tax.

jacqui1026Author

Level 2

Thanks for clarifying! Appreciate the prompt response:)

Lisa995

Answer

Alumni - Champ

If you itemized in the prior year and took a deduction for state taxes paid, then the state refunds you received do get included as income the current year.

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