topic 1099 G from Oregon in State tax filing

1099 G from Oregon

al56 — Sun, 15 Mar 2020 01:47:44 GMT

In July of 2019, I filed amended Federal and State (Oregon) returns for tax year 2017. As a result, I received some refunds from Federal and State. Oregon sent me a 1099-G with the refund amount. Is this taxable income?

Re: 1099 G from Oregon

hbl3973 — Sun, 15 Mar 2020 02:27:35 GMT

If your 2017 amended federal tax return claimed itemized deductions rather than the standard deduction, then, yes, at least some, and in most case all, of that state tax refund is considered 2019 taxable income. If that is the case, to determine how much of the refund is taxable you will calculate the difference between your 2017 itemized deductions and your 2017 standard deduction and report the lesser of that number and your 1099-G tax refund. If you claimed the federal standard deduction then the refund is not a taxable item.

The basic idea is that an itemizer is required to list all state and local taxes on their Schedule A and therefore was required to subtract more state and local tax than was actually paid in the end. The IRS handles this by adding back the amount of the over-deduction to income in the year the refund was received.

Re: 1099 G from Oregon

al56 — Sun, 15 Mar 2020 17:22:16 GMT

Thank you. Your explanation is very clear.

Re: 1099 G from Oregon

JotikaT2 — Sun, 15 Mar 2020 18:01:51 GMT

It depends.

Your state refund will either be fully taxable or even partially taxable depending upon how much the deduction affected your refund or tax liability.

All 3 of the following must be true:

You itemized deductions last year
You claimed state and local income taxes
Claiming the deduction helped you increase your federal refund or lower your tax bill

If all of the above applies for you, review your input to ensure the refund is entered in the correct place in the program:

Select Federal
Select Income & Expenses
Select Other Common Income
Select Refunds Received for State/Local Tax Returns
Proceed to enter the information and answer all of the questions