Tax Year Prior to 2020: Nonresident Alien for 2017, but Resident Alien for 2018

[ruanhattingh]

Hi,

I was wondering if someone could help me:

I was an NRA for tax year 2017 and filed 1040NR, and so itemized my deductions. I got refunds on both my Federal and State (CA) taxes. For 2018 I am an RA and am using form 1040 for the first time. How do I treat my tax refunds for 2018, are they both taxable on my Federal and State returns?

Any help is much appreciated!

Thanks!

[KarenL]

Typically, only the state refund is potentially taxable.   As you go through the software, using the interview process, you will be asked questions about your refunds.  There is a worksheet the software will produce that will calculate how much, if any of your state refund will be included as taxable income on your federal tax return.   

Most states don't tax a federal refund, but some do so be sure to go through the state section and read the questions carefully to determine if your state taxes the federal refund.