HARPTA Withholding

[JAS133]

I received a refund of the HARPTA withholding and was sent a 1099-G that shows it as a Net Income Tax Refund. I talked to the state and they say it may or may not be taxable depending on if I itemized my deductions last year. So how is it that they can take may money and when they refund it they tell me it is income? It was not income, and I lost money when I sold my condo, of course that loss is not deductible. Help!

[MarilynG1]

When you sold your condo, you could have deducted HARPTA tax you paid.  Then when you get it refunded to you and report the income, it's a wash.  If you sold your condo in a prior year, you could amend that year's return to claim the tax paid.  

However, the state is correct that if you did not itemize when you sold the condo, you did not get the deduction.  Likewise, when you report your 1099-G as income, if you don't itemize, the income will not be taxable.  You are just reporting.

Click this link for details on reporting HARPTA withholding/income.