Deductions & credits
There is a difference between line 5c versus all of the taxes you paid section and a refund. If you received a state refund, it may or may not be taxable. For example, if you were limited with state and local taxes to $10,000 but paid $14,000 and received a refund of $3,000 then it is not taxable since it is less than the amount you were limited. On the other hand, if your itemized deduction for state taxes was $8,000, you were not limited and your refund is taxable because you did deduct that money.
Your sch A for itemized deductions has line 5c. The 2023 Instructions for Schedule A - Itemized Deductions state:
Line 5c State and Local Personal Property Taxes Enter on line 5c the state and local personal property taxes you paid, but only if the taxes were based on value alone and were imposed on a yearly basis. Example. You paid a yearly fee for the registration of your car. Part of the fee was based on the car's value and part was based on its weight. You can deduct only the part of the fee that was based on the car's value.
