If all three of the following are true, your refund (or part of it) counts as taxable income:
- You itemized deductions last year, instead of taking the standard deduction.
- You claimed state and local income taxes (not general sales taxes).
- Claiming the deduction helped you increase your federal refund or lower your tax bill.
When you enter your information and answer the questions, TurboTax will calculate the taxable amount.
If you transferred last year’s tax data to this year's return, your state and local refunds are automatically brought over with your other tax info.
If not, enter your 1099-G form:
- Go to wages and Income
- Go to Other Common Income
- Select Refunds Received for State/Local Tax Returns
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