Tax Advice

[lkvan]

I paid quarterly estimates to the State of Michigan in 2019 based on 2018 tax return. I ended up not owing anything in 2019. The amount I paid was carried over to 2020 and again I owed nothing. I requested to have the money returned and I received it back in 2021. Since I owed no money in 2019 or 2020, is the estimate I paid taxable on my federal return?

[Bsch4477 · Accepted solution]

It would only be taxed if the amounts were used to increase itemized deductions in the year it was first paid to the state. 

[lkvan]

Thank you!