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Level 6

Solved

State Tax Return Refund & Federal Return

Forum|Forum|3 years ago
February 10, 2023
1 reply
0 views

Hi, if I filed a 2021 state tax return in the State of Delaware in Feb. 2022 for my daughter and she received a modest refund. Was I supposed to include the state tax refund as income on her 2022 Federal Return? Her 2022 taxable income was $0.00 after the standard deduction and exemptions. Thanks

Not A Product Question

Best answer by Monikak11

A state tax refund from filing the prior year's taxes would only be taxable if there was a tax benefit - i.e., you took an itemized deduction for taxes paid. Since your daughter's return for 2021 took the standard deduction, then she didn't deduct the taxes on her 2021 return and the refund isn't taxable for 2021.

Enter a 2021 refund in the 2022 TurboTax program and TurboTax will confirm whether it's taxable.

See this help article for more information.

Monikak11Answer

Level 2

A state tax refund from filing the prior year's taxes would only be taxable if there was a tax benefit - i.e., you took an itemized deduction for taxes paid. Since your daughter's return for 2021 took the standard deduction, then she didn't deduct the taxes on her 2021 return and the refund isn't taxable for 2021.

Enter a 2021 refund in the 2022 TurboTax program and TurboTax will confirm whether it's taxable.

See this help article for more information.

fasteddie577Author

Level 6

Hi, the message stated that it was not taxable.

Level 2

Thanks for the follow-up post. You did the right thing by entering the refund in TurboTax.