To determine if a state refund is taxable income, first look at your 2023 tax year federal return. If you took the Standard Deduction, the refund is not taxable and needn't be entered.
If you Itemized Deductions, the program needs to know how much in state tax you deducted on Schedule A.
That would be listed on Line 5d and include all the state withholding on your 2023 tax forms as well as state sales tax and/or property taxes claimed.
If the state tax deduction was limited because of the SALT limit, anything over the limit is not taxable.
EXAMPLE- you paid 12,000 in state tax but was limited to 10,000, any refund 2,000 or less is not reported.
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