Local And State Tax Refund Taxable
You might receive Form 1099-G reporting a state or local income tax refund. If so, that doesn’t mean your refund is automatically taxable.
If you claimed the state or local income taxes you paid as an itemized deduction on last year’s return, usually your state or local refund is taxable. However, other circumstances might reduce your tax. The amount of your refund that’s taxable can be reduced by the difference between these:
- Itemized deductions you claimed last year
- The standard deduction for your filing status
To learn more, see “Other Income” in Publication 17: Your Federal Income Tax at www.irs.gov, and the State and Local Income Taxes tax tip.
In some cases, the IRS may propose changes to your tax return. Read the IRS definition and get more insight from the experts at H&R Block.
Are prepaid property taxes deductible? Read on to review what’s changed and what’s to come due to the many changes sparked by the Tax Cuts and Jobs Act.
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.
Learn more about letter 3172, why you received it, and how to handle an IRS notice of federal tax lien with help from the tax experts at H&R Block.