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    lakers03mc's Avatar
    lakers03mc Posts: 6, Reputation: 1
    New Member

    Dec 24, 2010, 01:53 AM
    How would a state refund be taxable in my federal return?
    ebaines's Avatar
    ebaines Posts: 12,132, Reputation: 1307

    Dec 25, 2010, 11:54 AM

    If you itemized deductions and so deducted state income taxes paid in one year, then receive a refund from the state in the following year, then that refund counts as income. However, if you didn't deduct the state income taxes, then the refund is not taxable.

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