Questions & Answers

Is my state refund 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. The general rule is that your state refund is taxable if you deducted your state tax payments on last year's federal tax return. However, there are a few exceptions that may reduce the taxable amount of your state refund or make it entirely nontaxable.

You can find out if you itemized deductions or if you took the Standard Deduction by looking at Form 1040, Line 9 on your 2019 tax return and comparing it to the Standard Deduction amounts in the left margin of Form 1040, page 1. If you didn't file a 2019 tax return, choose Standard when the software asks what deduction you took in 2019.

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