We've paid property taxes on our home since July 2022. We've been approved in the homestead act starting in May. We will receive a refund. Do I claim them on my taxes?

Forum|Forum|3 years ago
January 27, 2023
5 replies
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Carl

Level 11

Generally, a property tax refund or rebate is reportable income on your federal return only if you itemized deductions on your federal tax return in the tax year you paid it. But when it comes to a future transactions, one really can't give any definitive answer until two things happen.

1. You actually receive the money

2. You are ready to start your 2023 tax return, which won't happen until next year.

Tax laws can (and do!) change from year to year, without fail. So a "correct" answer provided now, may be the wrong answer come 2023 tax filing time.

ZhuoliA

Alumni - Intuit

As @Critter-3 and @Carl11_2 suggested, you don't need to claim the property tax refund through the homestead credit as income on your tax return unless you itemize your deduction in the prior year. However, you can still claim the property tax credit for the net property paid after considering the property tax refund received by filing form PTC on your tax return. Please see Nebraska's individual income tax guide for more information.

@churchgirl13892

Critter-3

Level 15

No ... it is not income as long as you do not deduct the taxes on the tax return to start with ... so you could only claim the taxes paid less the reduction that will be refunded. So if you paid $4000 in 2022 but they will return $1000 in 2023 only claim the $3000 on the 2022 return. If you do claim the entire $4000 paid in 2022 then you need to reduce the taxes paid in 2023 by the amount refunded. Either option is valid ... you figure out which works best for you.

ZhuoliA

Alumni - Intuit

Can you clarify which state you reside in?