Is my state refund that I received last year being counted as income this year?

[ErnieS0]

It depends. A state refund is taxable if all three of the following are true:

• You itemized deductions last year, instead of taking the standard deduction
• You claimed state and local income taxes (not general sales taxes)
• Claiming the deduction helped you increase your federal refund or lower your tax bill

Even when your refund is taxable, it may not be the entire amount. It depends on how much the deduction affected your refund or tax bill. Just answer a few simple questions about last year’s refund, and we’ll calculate the taxable amount for you.

Related Information:

• Where do I enter a 1099-G for a state or local tax refund?
• Did I itemize last year?
• How do I report last year's state or local refund without a 1099-G?
• Which deduction should I choose, state and local income tax or sales tax?
• Where do I find last year's state/local refund so I can report it on this year's taxes?