MD state tax payment made in 2019 for a previous year

theo152c · ‎June 28, 2020

Hello,

In 2019, I received at a Notice of Intent to Offset from Maryland for a previous tax year. I made the payment, but after, I received had learned that I over paid the Intent notice; thereby, receiving a refund for the over payment.

My question, will this over payment show up in my next year's i.e. 2020 taxes as income?

Thank you in advance,

Charles, Jr.

JotikaT2 · ‎June 30, 2020

It depends.

Your state refund will either be fully taxable or even partially taxable depending upon how much the deduction affected your refund or tax liability.

All 3 of the following must be true or the refund to affect your 2020 tax return.

You itemized deductions last year
You claimed state and local income taxes
Claiming the deduction helped you increase your federal refund or lower your tax bill

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MD state tax payment made in 2019 for a previous year

State tax filing