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For income tax purposes, the IRS has decided that the Massachusetts tax refund is not taxable. However, if you itemized your deductions and had the state and local taxes deduction, you may have to report this- in most cases if you filed your taxes before you received the special refund, it was not included as deductible taxes in 2021 so you do not report.
But where in TurboTax do I enter the funds I received from this special excess revenue check?
To enter the special excess revenue check that did give you a benefit on your federal 2021 return:
The IRS states:
If the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit (for example, because the $10,000 tax deduction limit applied) the payment is not included in income for federal tax purposes.
Payments from the following states in 2022 fall in this category and will be excluded from income for federal tax purposes unless the recipient received a tax benefit in the year the taxes were deducted.
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