State refund is taxable(when itemized deduction)?

VAer — Thu, 16 Apr 2020 19:55:05 GMT

I make a table (as an example), just try to make my question clear.

For case 2: if the salary is withheld $7k tax for state, that is exact amount.

Question for case 1: will the $1k refund be taxable in the next year?

Question for case 3: It ends up paying $5k to state for current year, but how about the $93K taxable income? By comparing to case 2 ($90k taxable income). In this case, I still need to pay $7 to state ($2k already paid as tax withholding, and paying another $5 based on tax return form). But for this case, it seems taxable income for federal government is $93k, while case 2 taxable income is only $90k. It seems I need to pay more federal tax for case 3.

Question for another assumption: If SALT limit is only $6k, then I pay same amount of federal tax for all three cases? Total deduction is $26k, and taxable income is $94k?

Thanks.

Re: State refund is taxable(when itemized deduction)?

Anonymous — Thu, 16 Apr 2020 19:53:10 GMT

you may want to checl the 1040 instructions page 83 which allows you to compute taxability of refund (tt state tax refund should follow this) but first raed the bottom of page 82 to see if the worksheet in pub 535 must be used.

topic State refund is taxable(when itemized deduction)? in Get your taxes done using TurboTax

State refund is taxable(when itemized deduction)?

Re: State refund is taxable(when itemized deduction)?