If you itemized in 2016 and claimed state or local income tax paid in 2016 as an itemized deduction, and then you got a refund of those taxes paid from the state or local government in 2017, you may need to report that refund as income this year.
If you did not itemize in 2016, the refund is not treated as income.
If you itemized, but used the state sales tax option over state income tax withheld, the refund is not treated as income.
The program makes you aware of the amount of the refund, but that does not mean the refund is being treated as income. To check look at line 10 of the 1040.
TO VIEW YOUR 1040 CLICK
Tax Tools on the left side bar
Tools on the drop down
View Tax Summary on the "Tools Center" screen
Preview my 1040 which appears on the left side-bar
