While completing our taxes, turbotax said that we do not have to pay tax on colorado refund because we did not itemize. am i understanding this right?

[CherylW · Accepted solution]

That is correct, in your case, you do NOT have to pay tax on your CO refund.

The reason you pay tax on any state refund is IF you itemize, you can write off those state taxes that are withheld from your paycheck.

If you don't itemize, then you don't deduct those taxes, so you don't have to report them.