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brian-biesecker2
New Member

If I paid VA state taxes last year, and received a smaller refund from MD last year, do I still have to record the MD refund as income on my federal taxes this year?

For the 2016 tax season I filed both Virginia and Maryland state tax returns. I owed Virginia taxes, but received a refund from Maryland. 

The Maryland refund was much smaller than what I owed in Virginia taxes. 

Do I still have to record the MD refund as income on my federal taxes for the 2017 tax year?  

Seems like the Virginia taxes I paid should offset the Maryland refund income. 

1 Best answer

Accepted Solutions
AnnetteB
Intuit Alumni

If I paid VA state taxes last year, and received a smaller refund from MD last year, do I still have to record the MD refund as income on my federal taxes this year?

Yes, you still need to include the MD tax refund as income on your Federal return. 

If you used itemized deductions in 2016, then the MD tax refund will be included as income.  If you used the standard deduction, then the refund will not be taxed. 

If you are using itemized deductions on your 2017 tax return, then the balance due that you paid to VA may be included as a deduction.  That way, it will offset the income from the MD tax refund.

To go to the section of the tax return to enter the VA balance due, use these steps:

  • On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
  • This opens a box where you can type in “state balance due paid” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
  • The search results will give you an option to “Jump to state balance due paid
  • Click on the blue “Jump to state balance due paid” link
  • Scroll to the bottom of the screen until you see Other Income Taxes Paid in 2017
  • Click Start or Update beside Balance due on your 2016 state taxes paid in 2017

View solution in original post

1 Reply
AnnetteB
Intuit Alumni

If I paid VA state taxes last year, and received a smaller refund from MD last year, do I still have to record the MD refund as income on my federal taxes this year?

Yes, you still need to include the MD tax refund as income on your Federal return. 

If you used itemized deductions in 2016, then the MD tax refund will be included as income.  If you used the standard deduction, then the refund will not be taxed. 

If you are using itemized deductions on your 2017 tax return, then the balance due that you paid to VA may be included as a deduction.  That way, it will offset the income from the MD tax refund.

To go to the section of the tax return to enter the VA balance due, use these steps:

  • On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
  • This opens a box where you can type in “state balance due paid” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
  • The search results will give you an option to “Jump to state balance due paid
  • Click on the blue “Jump to state balance due paid” link
  • Scroll to the bottom of the screen until you see Other Income Taxes Paid in 2017
  • Click Start or Update beside Balance due on your 2016 state taxes paid in 2017

View solution in original post

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