LenaH
Employee Tax Expert

Deductions & credits

If your state refund did not affect your tax liability last year, then it is not income in this year and will not be on your tax return. 

 

Your state refund is only taxable if all of the following three items apply: 

  • 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

 

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