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Category: Income

State Refund Worksheet

You may receive a 1099-G if you received a refund of state or local taxes. If you itemized deductions on your federal return in the year you received the refund, all or a portion of that refund may be taxable.

Section 1  Enter the: 

* amount of the refund

* amount of last year's deduction

* the filing status for last year

 

Section 2 If you filed as Married Filing Separate and were forced to itemize because your spouse itemized, enter the amount of the state tax refund. If this does not apply to you, skip this section. 

 

Prior Year Taxes If either of the following conditions apply, enter the information requested and the program will calculate the amount of the refund that is taxable on your return.

* If you applied part of the refund to your current year estimated tax, enter the amount in the 'Estimated Payments' box. 

* If you received a refund and itemized deductions claiming amounts paid for the state and local taxes, enter the amount deducted in the 'Prior Year Sales Tax Deduction' box.