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Is 1099-G taxable or not, seeing both depending on tax year?

My wife received 3 1099-G's for Philadelphia wage tax refunds for 2018, 2019 and 2020 (her work location moved outside the city in 2018 but we didn't realize she was still paying Philly city wage tax until last year). I can enter each 1099-G into turbo tax and specify the tax year they are for (which is specified in box 3 on the 1099-G) - but for some reason the 2018 and 2019 refunds increase my tax due but the 2020 refund does not. After entering all 1099-G's turbo tax asks whether I took the standard deduction in 2020 which I did. It doesn't ask that for 2018 and 2019, and I did take the standard deductions for those years as well. It seems those year's refunds shouldn't be taxable but not sure how I can specify this in turbo tax - any ideas?

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5 Replies

Is 1099-G taxable or not, seeing both depending on tax year?

If you took the Standard Deduction for the prior years they are not taxable and you don't even need to enter them.  Don't know why it increases the tax due.

Is 1099-G taxable or not, seeing both depending on tax year?

Thanks - upon further reading on the 1099-G it does basically say that - a penalty may be imposed if this income is taxable and it wasn't reported, so basically saying it doesn't need to be reported unless taxable. Since I received these forms I just blindly entered them - lesson learned! 

Is 1099-G taxable or not, seeing both depending on tax year?

I received a refund 1099G for Ohio in 2021 for 2019 tax year.

 

If I enter the information into Turbotax for "State and Local Tax Refund Summary", my taxes go UP.

However, in all the reading I've done, if I took the standard deduction in 2019 (I did), then I shouldn't be taxed on this.  But TurboTax raises my tax liability as if 2019 had been a non-standard deductions year.

 

How do I handle this?  Not putting the form in (since TT seems to already know about the amounts before I entered anything) seems wrong...

Is 1099-G taxable or not, seeing both depending on tax year?

@riversofbelief1 When you enter the state refund you are asked what was the tax year of the refund.  You should have indicate 2019.  After completing the entry there is a follow screen that asks if you took the Standard Deduction or Itemized for 2019.  You should have entered a 0 where indicated for not itemizing and then the refund will not be entered as taxable income.

Hal_Al
Level 15

Is 1099-G taxable or not, seeing both depending on tax year?

Solution #1: just don't enter the 1099-G, since you know it's not taxable.

Solution #2: carefully follow the interview, after the 1099-G screen, to cause it to be non taxable. 

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