Did you receive unemployment benefits? A state tax refund?
To enter a state or local tax refund (Form 1099-G) -
Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Other Common Income
On Refunds Received for State/Local Tax Returns, click the start or update button
Or enter state refunds in the Search box located in the upper right of the program screen. Click on Jump to state refunds
1099G box 2 is for a state refund you got last year. A State Tax Refund is taxable if you itemized deductions on that prior year's federal return and took a deduction for state income taxes instead of the sales tax. You got a deduction benefit for it so now you have to include it as income. If you took the Standard Deduction it is not taxable and you don't need to report it. Check your 1040 line 12 to see which deduction you took.
Thank you, Checked 1040 Line 12, and it is Itemized. What is the next step? How should I proceed?
When you go thru the entries on the Wages&Incoem page in TurboTax, there is a section for "1099-MISC and Other Common Income" in that section there is a subsection for State Tax Refunds....you go in there to make your entry of that state refund.
Whether any, or all of it ends up getting posted as income on your final Federal tax return, will depend on whether your state income taxes + Property taxes, were limited to the $10,000 SALT limit last year. If you transferred-in your 2023 tax file into 2024 at the start of your preparations, the basic info may already be pre-populated for you....but if this is the first time you used TTX, then you may need some of the $$ details from your 2023 filing to establish whether that state refund actually gets added as 2024 Federal income...or not.