Hello, I have received state tax refund last year and I did itemized deduction last year and claimed my state tax withholding. Baesd on what I read, I should be reporting this refund as an income in t

[KrisD]

Yes, the state tax refund you received in 2018 for the 2017 tax year return is taxable since you itemized and took state income tax withheld as a deductions but only up to the amount that it made a difference from taking the Standard deduction on your 2017 return. 

What does that mean? 

Say you claimed 500 state tax on your 2017 Schedule A and itemized with 6,500. And you get a 300 refund.

The Standard Deduction was 6,300, so only 200 made a difference, so you only claim 200 of the 300 refund. 

[mostafasayed86]

I have entered this information on turbo tax but it gave me that my state tax refund is not taxable. I believe this is wrong but I don't know what to do

[KrisD]

Did you pay AMT last year?

[mostafasayed86]

no, I didn't

[KrisD]

Perhaps go through the interview questions again. Did you take the state SALES tax rather than income tax?