State and Local Refunds in content page of articles
You might have received a Form 1099-G reporting a state or local income tax refund. If so, your refund isn’t automatically taxable.
You might have claimed the state or local income taxes you paid as an itemized deduction on last year’s return. If so, usually your state or local refund is taxable. However, other circumstances might reduce your tax. The amount of your refund that's taxable can be reduced by the difference between these:
Itemized deductions you claimed last year
The standard deduction for your filing status
To learn more, see "Other Income" in Publication 17: Your Federal Income Tax at www.irs.gov, and the State and Local Income Taxes tax tip.