Interest payments

[Ozkozk]

Thank you. One more question. Do we need to report the state tax refund from the previous year as an income? 

[Cynthiad66]

Yes, report last year’s state or local tax refund, and we’ll figure out if it’s taxable or not.

If all three of the following are true, your refund counts as taxable income:

• You itemized deductions last year, instead of taking the standard deduction
• You claimed state and local income taxes (not general sales taxes)
• Claiming the deduction helped you increase your federal refund or lower your tax bill

Even when your refund is taxable, it may not be the entire amount. It depends on how much the deduction affected your refund or tax bill. Just answer a few simple questions about last year’s refund, and we’ll calculate the taxable amount for you.

For additional information please click the following:  Do I Need to Report State Refund

@Ozkozk

[Ozkozk]

Hello, I was told i should not report it. I called Department of Revenue and they told me not to report. Why in this case you tell me to report? 

[DaveF1006]

It depends. You may report it for the reasons Cynthiad66 outlined above. If you report it, Turbo Tax will determine if it is taxable or not. It could be taxable if these conditions existed last year.

• You itemized deductions last year, instead of taking the standard deduction
• You claimed state and local income taxes (not general sales taxes)
• Claiming the deduction helped you increase your federal refund or lower your tax bill.

The Dept of Revenue may have not taken any of this into consideration. If you are certain that none of the situations pertain to you, then it doesn't need to be reported.  If you are not sure, you may need to review last year's return to see if you itemized your deductions. 

If you claimed a standard deduction, then you do not need to report.

@Ozkozk 

[Ozkozk]

Only if I itemized the deduction that I need to report the state refund as an income, is this correct? No I did not do that but I did not understand what you mean by claiming state and local tax incomes, how could I find it out? Thanks

[MarilynG1]

If you received a Form 1099-G for your State Tax Refund, here's how to enter it in TurboTax.

TurboTax asks if you itemized last year.  If you say NO, then the income is not taxable, just being reported (since the IRS also has a copy of your 1099-G).

State and Local Income Tax is what you paid on your W-2 income.  TurboTax picks up these amounts automatically for you when you enter your W-2.

@Ozkozk 

[Ozkozk]

I have not received 1099-G. Where can I find it? 

[DaveF1006]

A 1099 G is sent to you by the State Dept of Revenue to report a State income tax refunds, credits, or offsets. If you deducted state income tax the previous year then your state tax refund might be taxable, even if you didn't receive it. 

If you did not itemize the previous year and deduct state income tax, you do not need to report this on your tax return this year.  If you did however, you need to contact your State Dept of Revenue to receive a copy of it.

@Ozkozk 

[Ozkozk]

Thank you. İ did not itemize the previous year and did not deduct state income tax. I do not need to report the last year's tax refund as an income in this case? Is this correct?

[CatinaT1]

That is correct.