State refund is 1099G

Forum|Forum|1 year ago
January 31, 2025
5 replies
36 views

Why is a state refund sent a 1099G but a federal refund not sent? Do they only count state refund as income but not count federal refund as income?

xmasbaby0

Level 15

The IRS does not send you a 1099G for a federal refund. You do not enter anything on your 2024 federal return about your 2023 federal refund. You only enter the state refund if you itemized deductions on your federal return for 2023. If you used standard deduction for 2023, you do not enter the state refund.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

jyeh74Author

Level 6

yes but why is federal return not considered income? It’s still a refund.

jyeh74Author

Level 6

Why is a state refund considered taxable income but a federal refund not considered a taxable income? What is the reason for that?

DawnC

Level 15

Yes. Prior year Federal tax refunds (and payments) are not taxable (or deductible) on the current year's Federal income tax return.

If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income in the year you receive it. This includes refunds resulting from taxes that were over withheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. If you did not itemize your deductions in the previous year, do not include the refund in income. If you deducted the taxes in the previous year, include all or part of the refund in the year you receive the refund.

This information is found in Publication 525, Taxable and Nontaxable Income.

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