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

Form 433-A

IRS Form 433-A, Collection Information Statement, is used to determine taxpayer's ability to pay the IRS. Learn more from the tax experts at H&R Block.

In-Business Trust Fund Express Installment Agreement

Read the IRS definition of an in-business trust fund express installment agreement (IBTF express) and get more insight from the tax experts at H&R Block.

IRS Notice CP90C – Notice of Seizure and Your Right to a Hearing

Learn more about notice CP90C, why you received it, and how to handle an IRS seizure notice with help from the tax experts at H&R Block.

IRS Notice CP06A – Supporting Documentation Requested

Learn more about notice CP06A, why you received it, and how to handle an IRS CP06A notice with help from the tax experts at H&R Block.