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.
IRC 6020(b) gives the IRS authority to prepare a return on behalf of a business, commonly called a substitute for return (SFR). Learn more from H&R Block.
Most Forms 1099-G are received for unemployment compensation or from state or local income tax refunds. Learn more from the tax experts at H&R Block.
IRS Form 433-F, Collection Information Statement, is used to determine taxpayer's ability to pay the IRS. Learn more from the tax experts at H&R Block.
Following the TCJA, the IRS has made updates in 2018 to implement changes. Read on to learn more about the latest IRS tax updates.