Is federal tax on state refund owed for the year it was received?

[allanbracker]

I filed my 2017 state and federal returns at the very end of 2018. I received the state and federal refunds for 2017 in January 2019. I will now owe federal taxes on the state refund. I was told by a tax advisor that I should pay it for the tax year it was received, which would be 2019.  Is that correct?  Turbotax for 2018 wants me to pay it this year, but it does not know when I received the refund check from the state.

[VolvoGirl · Accepted solution]

Yes you don't report the state refund until next year when you do your 2019 return.  So you should delete lit or zero it out for 2018.