Do I need to claim my state refund from last year as federal income this year? It automatically added it in on TurboTax.

[VolvoGirl · Accepted solution]

A State Tax Refund is taxable if you itemized deductions on your 2024  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 and can delete it if it transferred over.