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.

 

Related Topics

Related Resources

IRS Letter 2626C – Request for Additional Information

The IRS is requesting additional information from you. Learn more about letter 2626C and how to handle it with help from the tax experts at H&R Block.

Did Not Receive A W2

Learn what to do if you did not receive a W2 with help from the tax experts at H&R Block.

Tax Extension Deadline Information

Do you need more time to file taxes? Learn more about the tax filing extension deadline for paper and e-filed returns with the experts at H&R Block.

What To Do When You Have an Estimated Tax Penalty

Learn more about your options to reduce or remove an IRS estimated tax penalty. Get the facts from the tax experts at H&R Block.