Income — Wages, Interest, etc. Workout

State and Local Refunds and Alimony

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Case Study 1: State and Local Refunds

In your interview with Nancy, you learn that she received a refund of the previous tax year's state income taxes. What do you need to know to determine if Nancy owes taxes on her state tax refund?

Click here for an explanation.

You need to ask Nancy:

Did you itemize your deductions last year?
Did you include the state and/or local income taxes that you paid for that year?

If the answer to both questions is yes, complete the state tax refund worksheet in the software. The software calculates the taxable part of the refund (if any) and enters the amount on Form 1040.

Form 13614-C Part III Income, line 5 Refund state and local income taxes checked YES.

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Workout Resources
Types of Income
- Skills Workout: Types of Income
Wage Income
Tip Income
Scholarship and Fellowship Income
- Skills Warm Up: Reporting Scholarship Income
- Case Study 1: Reporting Scholarship Income
Interest Income
Dividends and Corporate Distributions
- Skills Warm Up: Dividend Distributions
State and Local Refunds and Alimony
Out of Scope
- Out of Scope Situations for VITA/TCE
Skills Workout
- Certification Warm Up: Question 1 of 2
- Certification Warm Up: Drill & Practice
More Resources and Practice
- More Resources and Practice

Form 1099-G, Certain Government Payments
State and Local Income Tax Refund Worksheet
Publication 4012 Taxable State Refunds

Form 1099-G, Certain Government Payments

State and Local Income Tax Refund Worksheet

Publication 4012 Taxable State Refunds