Is my state refund taxable income if I itemized my federal tax return?
It is possible that your state refund is taxable income. You may need to claim all or part of it if:
- You received a state or local income tax refund, credit, or offset.
- You itemized deductions
You had the option to choose to deduct either state and local income taxes or general sales taxes. If you chose general sales taxes, none of your refund is taxable.
If you chose state and local income taxes, your state refund is taxable. However, it’s only taxable to the extent that it’s more than the refund you would have received by choosing the larger refund from these:
- Standard deduction
- General sales tax
Make it your New Year's resolution to file a quick tax return online. Learn how to be the most prepared once e-file opens with H&R Block.
Find out if you can claim the standard deduction if your spouse itemizes their deduction but you are filing separately with help from the tax experts
Learn about property tax breaks from the experts at H&R Block. Our tax pros will explain whether you can deduct property taxes.
Learn more about the requirements for claiming full time college students on your taxes with advice from the tax experts at H&R Block.