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It just wants to know about federal. Say you took the Standard Deduction.
A State Tax Refund is taxable if you itemized deductions on that prior year's federal return and took a deduction for state income taxes instead of the sale tax. You got a deduction benefit for it so now you have to include it as income. If you took the standard deduction it is not taxable and you don't need to report it.
It just wants to know about federal. Say you took the Standard Deduction.
A State Tax Refund is taxable if you itemized deductions on that prior year's federal return and took a deduction for state income taxes instead of the sale tax. You got a deduction benefit for it so now you have to include it as income. If you took the standard deduction it is not taxable and you don't need to report it.
Thank you.
The instructions in Turbo Tax made it seem that was correct, and it also makes sense. That was some good news in an otherwise not so great week.
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