Refund received for State/Local Tax returns

[Morgen]

Under the wages & income section- There is a spot that says Refund received for State/Local Tax returns.. Is this auto generated? Is it something that has to be included? I don’t know where the amount came from or if it is right?

[DavidD66]

If you used TurboTax last year, and you are using the same account this year, the TurboTax would have rolled forward the amount of any state/local refund due that was calculated last year. TurboTax will determine if it is taxable, based on prior year itemized deduction information, and if taxable, included on your tax return.  If you received a refund amount that is different, you will need to adjust the amount in TurboTax.  

[Morgen]

So the amount should match how much my state refund amount was last year?

[Vanessa A]

Did you itemize you return last year?  If not, your state local refund is not relevant to your taxes this year.

The only time your state and local tax refunds are included in taxable income is if you itemized your return in a prior year and took a deduction for the taxes.  If you took a deduction and then got a refund you are getting a double tax benefit which the IRS doesn't like.  So, in this situation, you would add a 1099-G to your return where you are seeing the refund received for state and local taxes.

If you did not itemize your return, meaning you did not take a deduction for mortgage interest, medical expenses, state and local taxes and charitable contributions, you would have taken the standard deduction.  If you took the standard deduction, then you would not add your state or local refund to your return.

If you are seeing a number there, are you seeing it in the 2021 section or the 2022 section?  

Go back and look at your returns from 2021 to figure out which deduction you took. Look at line 12 and see if it matches what is on the side column or under the standard deduction statement.  You can also look to see if you have a Schedule A attached to your return.  If you do not, you did not itemize. 

You can also look at your 2022 Schedule 1 on line 1 to see if this income is being included in your taxable income for this year. As Davidd66 stated, if you are using the same account, TurboTax will auto fill this information. You just need to verify that it is the correct amount that you ended up receiving. 

[Anonymous50]

Hello, I did standardized deduction for tax year 2021. However, for tax year 2022, Turbo tax auto populate the "Refund received for State/Local Tax returns" section. I will be taking standardized deduction again for tax year 2022, should I delete this section?

Also, the amount for refund auto populated is less than the actual cash received for the state refund. The difference between the 2 numbers is due to NYC school tax credit, is this right?

[ErnieS0]

You can delete the section if you used the standard deduction in 2021 or you can go to the next screen "Let's See if Your 2021 Iowa Refund Is Taxable" and select I took the standard deduction in 2021.

Your state tax may is not taxable if you used the standard deduction.

The amount listed in TurboTax is correct if the New York City School credit is deducted since that part of your refund was not a refund of tax, but was a credit.

@Anonymous50