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Laura R
Level 2
June 1, 2019
Solved

Does state tax overpayment applied to following year's estimated state tax count as federal income for that following year when no refund check was actually issued?

  • June 1, 2019
  • 4 replies
  • 50 views

Wondering if there's a distinction based on whether I took possession of the funds.  If not, seems like there should be.

Best answer by Rainman12
If you take an itemized deduction in one year for State taxes paid, and that money is refunded or used in a later year, then that money is taxable. If used to pay State taxes, then taxable amount = deductible amount, so there is no actual difference after all calculations are completed ...

4 replies

L
Laura RAuthor
Level 2
June 1, 2019
Got it.  Thanks so much for your speedy response!
Rainman12
Alumni - Champ
Rainman12Alumni - ChampAnswer
Alumni - Champ
June 1, 2019
If you take an itemized deduction in one year for State taxes paid, and that money is refunded or used in a later year, then that money is taxable. If used to pay State taxes, then taxable amount = deductible amount, so there is no actual difference after all calculations are completed ...
L
Laura RAuthor
Level 2
June 1, 2019
Thank you.  This was actually clarified later in Turbo Tax.  I just hadn't gotten to that part yet.  I appreciate your help!
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