topic How do I report a state tax refund in Turbo Tax? Is it considered a "Taxable Grant"? in Education

How do I report a state tax refund in Turbo Tax? Is it considered a "Taxable Grant"?

bryne-p-hart — Sun, 08 Feb 2026 12:28:12 GMT

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Re: How do I report a state tax refund in Turbo Tax? Is it considered a "Taxable Grant"?

AnnetteB6 — Sun, 08 Feb 2026 13:03:15 GMT

No, it is not a taxable grant, which is also reported on Form 1099-G.

See the instructions in the following TurboTax help article to get to the right place to enter your state tax refund:

Where do I enter a 1099-G for a state or local tax refund?

Re: How do I report a state tax refund in Turbo Tax? Is it considered a "Taxable Grant"?

Hal_Al — Sun, 08 Feb 2026 13:27:57 GMT

Q. If a state tax refund is not taxable, why is there even a place to enter it in TurboTax (TT)?

A. Sometimes a state refund is taxable, so TT has to accommodate that situation.

Q. When does that occur?

A. When you previously deducted the refund amount. Using an example:

During 2024, your employer withheld $1000 in state tax and that was shown in box 17 of your W-2. So when you filed your 2024 FEDERAL tax return, in early 2025, you deducted that $1000, as an itemized deduction. But when you filed your 2024 state return, you got back $100, because your state tax bill was only $900. That $100 is taxable income to you on your 2025 tax return.