Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Income — Wages, Interest, etc. Workout

State and Local Refunds and Alimony

Skills Warm Up: State and Local Refunds

Question 1 of 1

Sharon claimed the standard deduction on last year's tax return and received a state tax refund. Is the refund taxable and, if so, how does Sharon report it?

No, the refund is not taxable
Yes, she should enter the total amount on Form 1040 as income
Yes, she should enter the total amount on Form 1040 capital gains line
Yes, she must use the appropriate worksheet to determine the amount to enter as income


Form 1099-G, Certain Government Payments
State and Local Income Tax Refund Worksheet - Line 10
Publication 4012 Taxable State Refunds

Form 1099-G, Certain Government Payments

State and Local Income Tax Refund Worksheet - Line 10

Publication 4012 Taxable State Refunds