What year do I add refunds from prior return?

[seleneaila]

Hi- I am filing late returns from 2016-2019 now. I’m unsure as to how to correctly report the state refunds as income - do I report on the following tax year or the year I receive the payment (likely 2021 at this point given the IRS takes 4-8 weeks to process mailed returns)?

 
For example, for 2016 and 2017 I am due a federal and state refund. I understand I have forfeited the 2016 refunds because I am beyond the 3-year mark, but my specific questions are:

1. Do I need to add the 2016 state refund to my federal tax return since I am not technically going to receive it (have forfeited it)?

2. What year would I add the the 2017 state refund to? The following tax year 2018 or the year I actually receive it (likely 2021)?

Turbo tax automatically adds it to the following tax year, but not sure if this correct. Thanks in advance for your help!

[VolvoGirl]

You enter a state refund the year you actually get it.  So on your 2020 or 2021 return.

Then 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.

[VolvoGirl]

So if you have not received the prior year refund when you file the next year you would need to delete it.  Then they probably will all go on the same future return.

[seleneaila]

@VolvoGirl thank you, this is super helpful!