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
Learn more about earned income credit eligibility and get tax answers at H&R Block.
Do you know what your tax filing status is? Learn how to determine and check your tax filing status with H&R Block.
Trying to determine the cost of tax preparation or H&R Block’s prices? Find out why there is no one-size-fits-all answer when it comes to tax prep.
Looking for virtual tax help with your online filing? Learn more about your options by comparing TurboTax Live to H&R Block Tax Pro Review and Tax Pro Go.
