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

Earned Income Credit

Learn more about earned income credit eligibility and get tax answers at H&R Block.

Taxes Get Personal: What’s Your Filing Status?

Do you know what your tax filing status is? Learn how to determine and check your tax filing status with H&R Block.

What Are H&R Block’s Prices?

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.

Is TurboTax Live the Best Virtual Tax Prep Option?

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.