Hi, I did my daughter's tax return in January. It is still pending final approval. Last week she received a 1099-G from when she worked in another state in 2023. When her 2023 state return was processed, she received a $69 refund in 2024, and according to letter she needs to report it on her 2024 federal tax return. Do I wait until her 2024 tax return is finalized before I submit an amended return? Thank you in advance.
Yes, you would wait until the original return is processed before filing an amended return HOWEVER
in some instances a state tax refund is reported on the federal return as taxable income.
If she took the Standard Deduction on her 2023 tax year Federal Return (and she probably did) the state refund is not taxable, she needn't report it.
She probably doesn’t need to report or enter that. She probably 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.
Yes, you would wait until the original return is processed before filing an amended return HOWEVER
in some instances a state tax refund is reported on the federal return as taxable income.
If she took the Standard Deduction on her 2023 tax year Federal Return (and she probably did) the state refund is not taxable, she needn't report it.
Thank you for the quick reply. My daughter always uses the standard deduction on her federal tax returns and also on the 2023 state tax return. So based on what you stated, I won't have to amend her 2024 tax return. Thank you very much.