Taxable State Refund (Form 1099-G)
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Enter on the Taxable State Refund (Form 1099-G, Box 2) screen.
The state refund you received last year is reported on a Form 1099-G. Last year's state refund only needs to be entered if it is taxable. Your state refund is NOT taxable if you took the Standard Deduction on last year's tax return instead of itemizing your deductions on Schedule A.
If you itemized your deductions on your 2024 federal income tax return, your state tax refund from 2024 is usually taxable.
However, the state refund will not be taxable if you either:
Enter on the Taxable State Refund (Form 1099-G, Box 2) screen.
The state refund you received last year is reported on a Form 1099-G. Last year's state refund only needs to be entered if it is taxable. Your state refund is NOT taxable if you took the Standard Deduction on last year's tax return instead of itemizing your deductions on Schedule A.
If you itemized your deductions on your 2024 federal income tax return, your state tax refund from 2024 is usually taxable.
However, the state refund will not be taxable if you either:
- Chose to deduct sales tax instead of state and local income taxes on your 2024 Schedule A, Line 5 - Itemized Deductions. - OR -
- Chose to itemize your deductions on your 2024 tax return even though your Standard Deduction would have been higher.
- Your taxable income was zero or negative on your 2024 tax return. - OR -
- Your Itemized Deductions from 2024 would have been less than your Standard Deduction if you did not have any state and local taxes in your 2024 Itemized Deductions.
