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    lxu8888's Avatar
    lxu8888 Posts: 10, Reputation: 1
    New Member
    		  
    #1

    Dec 3, 2009, 07:03 PM
    Tax on FICA Refund
    My previous Employer contacted me recently and told me that I will receive a refund check of the FICA from IRS for the few years I worked there as a research fellow. I have two questions about the tax issue of the refund money.
    (1) If I don't deposit the check this year, can I report the money in 2010 tax return (or still have to report for 2009)?
    (2) The refund money is coming from the earning I made several years ago. Now I am living in a different state. I don't know if I have to file a return to the old state or it is enough that I file the tax report to the current state by including the refunded money.

    Thank you very much.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Dec 4, 2009, 02:06 AM

    FICA refund is not a taxable income.
    lxu8888's Avatar
    lxu8888 Posts: 10, Reputation: 1
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    #3

    Dec 4, 2009, 07:26 PM
    Quote Originally Posted by MukatA View Post
    FICA refund is not a taxable income.
    Thank you very much for the information for the FICA refund.
    There are about 1/4 of the refund amount coming from interest. What will be the answer to my two initial questions for the interest. Thank you in advance.
    MLSNC's Avatar
    MLSNC Posts: 158, Reputation: 17
    Junior Member
    		  
    #4

    Dec 4, 2009, 09:34 PM

    Interest income received on the refund will be taxable. The interest becomes taxable based on when you receive it, not on when you deposit it.
    lxu8888's Avatar
    lxu8888 Posts: 10, Reputation: 1
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    #5

    Dec 5, 2009, 08:09 AM
    Quote Originally Posted by MLSNC View Post
    Interest income received on the refund will be taxable. The interest becomes taxable based on when you receive it, not on when you deposit it.
    Could you help me with the state question? Basically, the refund comes from the work in earlier year. Now I moved to another state. To pay the state tax, is it okay that I can only file the current state tax by including the interest, or I have to file separately for the interest to the old state. Thank you so much.
    MLSNC's Avatar
    MLSNC Posts: 158, Reputation: 17
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    #6

    Dec 5, 2009, 08:42 AM

    The interest income is taxable when you receive it and that would apply to the state return also. Therefore, you would pay state tax on the interest income to your state of residency on the date you receive the interest.
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