Can i deduct state taxes (paid via payment plan) if I paid over 2 years? For tax year 2016.

[c-cole]

I owed MD $650 in 2014. I made my final payment this year 2016. Can I deduct that full amount this year?

[DoninGA]

You can deduct payments made in 2016 for state income taxes owed in a prior tax year on a federal tax return.  You cannot deduct any penalties or interest paid or payments made in prior tax years.

• Click on Federal Taxes (Personal using Home and Business)
• Click on Deductions and Credits
• Click on I'll choose what I work on (if shown)
• Scroll down to Estimates and Other Taxes Paid
• On Other Income Taxes, click on the start or update button

Scroll down to Other Income Taxes Paid in 2016.  Select the type of taxes paid