- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Why do I need to report previous year's state tax refund as income if I didn't itemize deductions last year?
On the page for entering income, in the section "1099-MISC and Other Common Income", TurboTax has entered my Massachusetts state tax refund from 2021. However, the "Learn More" explanation contains the following language:
State and local income tax refunds may be taxable in the year you received them if all of the following occurred:
- You got an itemized deduction for state and local income tax in the prior year.
- You received a benefit from taking the deduction. For example, the deduction increased your federal refund or reduced your tax liability.
- You received a state or local refund, even if you didn't receive a 1099-G.
Your state and local income tax refunds are not taxable if any of the following apply:
- You took the standard deduction in the prior year (you did not itemize your deductions).
- You had negative taxable income (your deductions exceeded your adjusted gross income).
- You itemized deductions, and elected to deduct state and local general sales tax instead of state and local income taxes.
I took the standard deduction, so why has TurboTax included it here? Should I delete this entry?
Thanks