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
Related Resources
Changing jobs can come with tax implications like job search and moving expense deductions. Learn more about these potential benefits at H&R Block.
If you’re itemizing deductions, the IRS generally allows you a medical expenses deduction if you have unreimbursed expenses that are more than 7.5% of your adjusted gross income for tax years 2017 or 2018. You can deduct the cost of care from several types of practitioners at various stages of care.
Due to the recent TCJA changes, we have re-released our trusted Tax Calculator. With a side-by-side comparison, you can now plan for this year's tax filing.
When it comes to making everyday tax decisions, we find that there's a gap between what's true and what's rumored. Let's explore four common tax myths.
