Question

Is my state refund taxable income if I itemized my federal tax return?

Answer

 

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:

 

 

Related Topics

Related Resources

How to File A Quick Tax Return Online

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.

Is Your Working Vacation Tax Deductible? | H&R Block

Planning a working vacation? Your travel expenses may be tax deductible if your trip is mainly business-focused. Learn more with the experts at H&R Block.

What AGI Amount Should You Use for E-filing?

Filed last year’s taxes after the due date? You might need to use something other than your last year’s AGI amount to e-file.

Tips for Claiming a Casualty Loss Tax Deduction

2017 has beckoned record-topping natural disasters. From wildfires in California to hurricanes throughout the south, the casualty loss tax deduction is a hot topic. Read to learn more.