Why is my 2017 refund taxable?

[JulieR]

Your 2017 state refund may be fully or partially taxable. If all three of the following are true, your state refund counts as taxable income:

• You itemized deductions last year, instead of taking the standard deduction.
• You claimed state and local income taxes (not general sales taxes).
• Claiming the deduction helped you increase your federal refund or lower your tax bill.

Your prior year Federal refunds are never taxable on your Federal return.

Please comment if you have additional questions regarding this subject.