My state tax was applied to a federal tax bill from a previous year. Is it still considered taxable income?

badguts · ‎June 1, 2019

DanielV01 · ‎June 1, 2019

If you itemized last year and claimed the state taxes withheld as a deduction, then yes. It does not matter that the refund was offset; it was still a refund used to lower a Federal liability you had. You never saw the money, but you did receive the refund.

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View solution in original post

DanielV01 · ‎June 1, 2019

If you itemized last year and claimed the state taxes withheld as a deduction, then yes. It does not matter that the refund was offset; it was still a refund used to lower a Federal liability you had. You never saw the money, but you did receive the refund.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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My state tax was applied to a federal tax bill from a previous year. Is it still considered taxable income?