In general, if you didn’t deduct state and local income taxes last year, you don’t need to pay taxes on your state and local tax refund this year.
If you didn't itemize last year or if you deducted the sales tax instead of State and local income tax, your refund won't be taxable.
When you enter the 1099-G form and answer the questions, TurboTax will calculate the taxable amount.
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