Married in 2017, both single for 2016, question about state income tax refund taxable determination

[tlund]

My wife and I got married in 2017.  So far, I am choosing to file Married filing jointly for 2017.  We both filed single for 2016.   I itemized 2016 returns, and used TTax, so info was transferred over to TTax.  She did not itemize, and used HRB for tax prep, so no info is transferred.

TTax is asking for info about our state refunds to determine if it is taxable. I am only allowed to enter one state refund (combined amounts for us both) in TTax.  It is now asking questions about Line 5 of Schedule A of 2016 (since she didn't itemize, I just put my info), and 2016 filing status (we both filed single, so I selected single), whether I HAD TO ITEMIZE, neither of us did, so "No", next is how may boxes in Box 39a of the federal return were checked, zero on both, so I put zero, then "Report 2016 Return Info" from 1040, with values supplied from my 2016 return (lines 37, 40, 42, etc).

Do I need to add my wife's 2016 return info into those boxes?

[DS30 · Accepted solution]

No - You do not need to add her information to these boxes or include her state tax refund in the amount of reported refund.

If you itemized and she did not in 2016, her 2016 tax refund will not need to be included on your jointly filed tax return because no portion of her refund will be considered taxable income in 2017. This is due to the fact that she did not receive any tax benefit related to taking an itemized deduction related to her state income states on your 2016 tax return (she claimed the standard deduction instead).

Therefore, you only need to include your 2016 tax refund and your 2016 tax information when trying to determine if any of your state income tax refund needs to be considered taxable on your jointly filed 2017 tax return.