topic Why is my 2021 state tax refund being counted as income for 2022? in After you file

Why is my 2021 state tax refund being counted as income for 2022?

Valerie5816 — Mon, 23 Feb 2026 10:35:47 GMT

Is 2021 state tax refund considered income for 2022?

Re: Why is my 2021 state tax refund being counted as income for 2022?

fanfare — Sat, 21 Jan 2023 03:39:48 GMT

it is if you deducted that amount on 2021 Schedule A

Having got it refunded, you didn't pay it, so you couldn't deduct it.

the deduction is cancelled out by calling it income now.

@Valerie5816

Re: Why is my 2021 state tax refund being counted as income for 2022?

ee-ea — Sat, 21 Jan 2023 03:38:09 GMT

See this info

https://blog.turbotax.intuit.com/tax-tips/is-my-state-tax-refund-taxable-and-why-90/

Re: Why is my 2021 state tax refund being counted as income for 2022?

VolvoGirl — Sat, 21 Jan 2023 03:40:57 GMT

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 sale 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.

Re: Why is my 2021 state tax refund being counted as income for 2022?

DawnC — Sat, 21 Jan 2023 03:57:49 GMT

If you entered in TurboTax, it will show up on the income screen, but that doesn't mean it is reported on your tax return. Only if all three of the following are true, your refund counts as taxable income:

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. The amount that is taxable depends on how much the deduction affected your refund or tax bill last year. More information

Re: Why is my 2021 state tax refund being counted as income for 2022?

VolvoGirl — Sat, 21 Jan 2023 04:06:35 GMT

@DawnC Can you please explain (and ask Turbo Tax to post a help article) that CA Middle Class Tax refund on a 1099Misc is NOT the same kind of state refund you got on your tax return on 1099G. And it is still taxable even if you took the Standard Deduction. There's one guy around here I don't know how to explain that to. Unless I'm all wrong.

This guy Ace in Space on this thread.
https://ttlc.intuit.com/community/self-employed-group/discussion/i-received-a-middle-class-tax-refund-from-the-state-of-california-is-this-considered-taxable-income/00/2819885

Re: Why is my 2021 state tax refund being counted as income for 2022?

DawnC — Wed, 25 Jan 2023 02:54:37 GMT

State Stimulus Programs by State - California (click on link for other states)

Program name: Middle Class Tax Refund
Payment amount to qualifying taxpayers: $200–$1,050
Tax form issued: 1099-MISC for payments of $600 or more
Taxable on the federal tax return? The payments may be considered federal income and may be taxable. The IRS hasn't said yet.
Taxable on the state tax return? No
For more info: Contact CA Franchise Tax Board at 800-542-9332 and you may estimate your refund here