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New Member
posted Feb 16, 2020 11:58:12 AM

State and local tax refund from 2018 keeps popping up on my return and I have no idea what this is or what it is cor

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1 Replies
Employee Tax Expert
Feb 16, 2020 12:12:44 PM

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:

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