[deepakz_world]

Hi,
I received a refund form 1099-G from CA state for Tax Year 2006. The form states that:
"The refund amount may need to be reported on your Federal Income Tax Return if you claimed state income tax payments as an itemized deduction as Schedule A of your Federal Income Tax Return and received a refund from your California State Income Tax Return."

I did not claim the state income tax as itemized deduction on Federal Income Tax Return in 2006. Do I still have to add this refund amount in my Federal Adjusted Gross Income when filing tax return for 2007?

Any help is greatly appretiated.

[MukatA]

If you did not claim itemized deduction for the state income tax in 2006, then state tax refund for 2006 is not a taxable income.

[deepakz_world]

Thank You :-)

[danielnoahsmommy]

Would she have to amend her 2006 federal return to include amount on 1099-G?

[AtlantaTaxExpert]

Negative. The refund from the 2006 state return was received in 2007, and would be added to her 2007 tax return if, in fact, it was taxable income.