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Get your taxes done using TurboTax
The refund of penalties and interest is not income and you do not report it on your federal or state tax returns.
(If you had claimed an itemized deduction for the penalties and interest on your federal tax return for the year that you paid them, then you would have to report the refund as income. But you should not have claimed a deduction for the penalties and interest because they are not deductible.)
‎July 25, 2023
8:14 AM