Does not reporting Maryland state 2015 refund for 2016 tax o.k.?

galettobk · ‎May 31, 2019

We itemize but what we understood from Turbo Tax we could get by not listing new car sales tax on 2015 return by not listing 2015 Maryland refund on 2016 return. Other publications have said o.k. Just want to make sure.
If so, the questions following deletion on turbo tax form don't apply to us.
Help.

Anita01 · ‎May 31, 2019

In claiming the state refund, what matters is itemizing in the prior year, not the current. If you itemized in 2015, and claimed state income tax as a deduction, the state tax refund you got in 2016 is taxable.

If you choose not to itemize in 2016, the state refund would not be taxable in 2017. If you itemize in 2016, and use the state sales tax instead of the income tax, then your state tax refund is also not taxable the next year.

View solution in original post

Anita01 · ‎May 31, 2019

In claiming the state refund, what matters is itemizing in the prior year, not the current. If you itemized in 2015, and claimed state income tax as a deduction, the state tax refund you got in 2016 is taxable.

If you choose not to itemize in 2016, the state refund would not be taxable in 2017. If you itemize in 2016, and use the state sales tax instead of the income tax, then your state tax refund is also not taxable the next year.