You should
enter last year's state or local tax refund and TurboTax will ask questions to
determine if it is taxable or not.
If
you took the state and local tax deduction last year and itemized, the refund
will be taxable this year if the deduction benefitted (reduced) last year's tax
bill. This is true even if you opted to apply the refund to this year's state
or local return.
But
if you took the sales tax deduction or the standard deduction last year, it
won't be taxable on this year's return. It also won't be taxable if last year's
return was subject to the AMT (Alternative Minimum Tax) and the refund amount
was less than the amount disallowed under AMT.
To
enter a 1099-G for a state or local refund
- Please click on the
Federal Taxes tab, at the top.
- Then select, Wages
and Income
- You may see a
prompt for your 1099 but if not, click on
- Check for More
Income and See All Income
- Click on Show
More beside Other Common Income by the green $ money bag
- Click on Start by
Refunds Received for State/Local Tax Returns
-
Yes to continue and
add the 1099-G for a state or local refund
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