Taxability of a 2022 State Tax Refund

[sansin]

I have a related question. I lived in NJ but worked in NY. Therefore, received a refund from both states. When I am entering the 1099-G for each state should I enter the same amount for 'Total of all your payments and withholding' both times?

[VolvoGirl]

@sansin  Did you take the Standard Deduction or itemize on you 2022 federal tax return?  

A State Tax Refund is taxable if you itemized deductions on that prior year's federal return and took a deduction for state income taxes instead of the sale tax.  You got a deduction benefit for it so now you have to include it as income. If you took the standard deduction it is not taxable and you don't need to report it.

[sansin]

I took an itemized deduction. Thanks

[DoninGA]

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@sansin wrote:

I have a related question. I lived in NJ but worked in NY. Therefore, received a refund from both states. When I am entering the 1099-G for each state should I enter the same amount for 'Total of all your payments and withholding' both times?

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You enter the state tax refund amount individually for each state.  After you have completed entry of the first state 1099-G you will land on the screen State and Local Tax Refund Summary.  Click on the button Add Another State or Local Tax Refund to enter the second state tax refund 1099-G.

[sansin]

I understand but am I supposed to enter the same amount in "Total of all your payments and withholding" when entering the refund for each state?

[DoninGA]

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@sansin wrote:

I understand but am I supposed to enter the same amount in "Total of all your payments and withholding" when entering the refund for each state?

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Add up any payments you made to your state or locality, along with any state or locality withholdings from the previous tax year, including:

- Amounts withheld on your W-2, W-2G, and 1099
- Estimated tax payments for 2022 (including any paid in 2023 for 2022 - it's common for the fourth quarterly payment to be made in January)
- Overpayment from 2021 applied toward your 2022 return
- Payments made with an extension of time to file
- Refundable credits

You can find most of this info on your 2022 state tax return. Do not include balance due payments made with (or after) filing a return.

[Keith L]

Recompute your 2022 Federal income tax liability first without the state income tax deduction to see if you actually received a tax benefit from the entire amount of the 2022 state income tax deduction.  The refund received in 2023 is only reportable as income on your 2023 Federal income tax return to the extent that you received a tax benefit from the deduction on the 2022 Federal income tax return.

[sansin]

I did that. My question is that there is field for 'Total of all your payments and withholding' when I enter the 1099G for New York, and then again when I enter the 1099G for New Jersey. Am i supposed to enter the same number both times or just when I enter the 1099G for New York because that is the state i worked in.

[DoninGA]

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@sansin wrote:

I did that. My question is that there is field for 'Total of all your payments and withholding' when I enter the 1099G for New York, and then again when I enter the 1099G for New Jersey. Am i supposed to enter the same number both times or just when I enter the 1099G for New York because that is the state i worked in.

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Just enter the number once for the state you worked in.