Hi, please help!

I am NR. Last year I filed 1040NR and also IT203 (state income tax return). On federal tax return I itemazied my deductions (the only deduction was my state tax). I got a refund form state tax return and its reported on form 1099-G. Now I am asked to report this refund as income in my current federal tax return. I think that I got a redund because I paid more, if I include this as an income, I think it will be double taxtation.

Please help, should I include this as an income and why?

Thanks in advance.

Yes, if you claimed itemized deduction for state income tax, then this is income.

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Originally Posted by MukatA

Yes, if you claimed itemized deduction for state income tax, then this is income.

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Thank you, but one more clarification, in my state income return I took standard deduction (I itemized deduction in federal tax return).

Thanks.

Does not matter whether you itemized on the state return or not; the state refund is taxable income if you itemized on your federal return.

You are not being double taxed because you were able to deduct state income taxes last year when you really didn't owe them (to the extent you got a refund).