How to handle state refund filing jointly for the first time

[francescb]

How to properly enter last year's state refund if filing jointly for the first time if I itemized and my spouse took standard deduction last year?

[rjs]

Since your spouse took the standard deduction for 2023, your spouse's state refund is not taxable, and you do not report it on your joint 2024 tax return. Basically you ignore your spouse's refund and answer all the questions about the state refund as if they apply only to you. On the screen where you enter your state refund, enter only your own refund (even though it says "Total Refund Received"). A couple of screens later it asks whether you took the standard deduction or itemized in 2023. Select "I itemized my deductions in 2023." The next screen offers two choices. You can use either one. You can take the easy way out and just make the full amount of your refund taxable. Or you can select the option to enter information from your 2023 tax return. If you do that, enter the information from only your 2023 tax return.

(Note to anyone else reading this: This solution only works because one spouse took the standard deduction in 2023.)

[francescb]

Thank you very much!