KrisD15
Expert Alumni

Get your taxes done using TurboTax

If you are getting a Federal refund, that will not count as income next year, so a Federal refund will not affect your over-all income on your tax year 2026 returns.

 

Additionally, a state refund will not count as Federal income the following year if you used the Standard Deduction, rather than Itemizing Deductions, on your tax year 2025 Federal return. (And it never counts as state income on a state return). 

 

So if you are worried about owing Federal tax next year on a Federal refund you get this year, no, that will not be added as income next year. It is the excess tax you paid in 2025. 

 

State refunds are a little different since a person could claim state tax paid on their Federal return as a deduction and then get some of that state tax back. (Because we do the Federal Returns BEFORE the state returns). But "state tax paid" is only claimed as a deduction on a Federal return using Schedule A "Itemized Deductions". 

 

If you use the Standard Deduction on your 2025 return, neither state nor Federal refunds matter the following year. 

 

 

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