topic Re: State Refund Taxability in Get your taxes done using TurboTax

State Refund Taxability

Renald — Mon, 09 Mar 2026 05:54:50 GMT

I received a 1099G for a State (NC) Tax refund for 2019 for an amount that should not have been taxed (a retirement payment that is exempt under NC law). I understand that refund should not be taxable by the feds if I used the standard deduction that year, which I did. Yet the TT worksheet put the amount on Sched 1, line 1 and Form 1040, line 8. How do I correct this? Ignore the 1099 G? Thx for any help!

Re: State Refund Taxability

KrisD15 — Thu, 17 Feb 2022 00:39:16 GMT

Please clarify,

retirement payments, even state retirements, are reported on 1099-R.

Can you explain further the 1099-G?

Re: State Refund Taxability

Renald — Thu, 17 Feb 2022 00:49:46 GMT

For 2019, the retirement payment was indeed reported on a 1099-R and entered as such on my state and federal returns for that year. Two years later, I learned that this payment should have been exempt under the so called Bailey Case under NC law. So I filed an amended return and did indeed receive a refund of the NC tax I paid back in 2019. I received that refund in 2021 and it was that refund that is now being reported to me (and the IRS) on a Form 1099-G. I hope that answers your question?

Re: State Refund Taxability

VolvoGirl — Thu, 17 Feb 2022 00:57:20 GMT

You must have answered a question wrong. If you took the Standard Deduction for 2019 it shouldn't be taxable and you don't need to enter it.

Re: State Refund Taxability

Mike9241 — Thu, 17 Feb 2022 04:18:05 GMT

since you used the standard deduction that year it is not taxable. the easiest thing to do is not enter it.