Is my state refund taxable income if I itemized my federal tax return?
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 on your federal income tax return.
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:
- Standard deduction
- General sales tax
If you need help handling an estate, we're here to help. Learn how to file taxes for a deceased loved one with H&R Block.
From retirement account contributions to self-employment expenses, learn more about the five most common tax deductions with the experts at H&R Block.
Getting married? Having a baby? Buying a house? Go through your life events checklist and see how each can affect your tax return with the experts at H&R Block.
Donating household goods to your favorite charity? Learn the ins and outs of deducting noncash charitable contributions on your taxes with the experts at H&R Block.