If you entered in TurboTax, it will show up on the income screen, but that doesn't mean it is reported on your tax return. Only if all three of the following are true, your refund 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
Even when your refund is taxable, it may not be the entire amount. The amount that is taxable depends on how much the deduction affected your refund or tax bill last year. More information
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