State Tax Refund - Received in Current Year for Last Year's State Return

If you itemized deductions on your federal return in the 2018 tax year, then a state refund that you received in 2019 may be taxable. You would enter the amount in the State Tax Refund section of TaxAct®. If you did not itemize on your 2018 federal return, then the state refund would not be taxable to you.

To enter the state tax refund:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
  2. Click State Income Tax Refund in the Federal Quick Q&A Topics menu and then click +Add Form 1099-G State Refund Document to create a new copy of the form and enter the information from your Form 1099-G, or click Review to review a form already created
  3. Once all forms have been entered and you are back on the screen titled State or Local Income Tax Refund - Document - Summary, click Continue and then click Yes if you want to determine what portion (if any) of the refund amount(s) entered are taxable on your return (if you imported the information from your last year's return, click Yes to review the screens and ensure the calculation is completed correctly)
  4. The program will proceed through the applicable screens for you to enter or review the information from your prior year federal return to determine the taxable amount (if any) of your state income tax refund. After you have entered the information, you will reach a screen titled State or Local Income Tax Refund - Taxable Refund which will indicate the taxable portion (if any) of your prior year state income tax refund based on the entries on the previous screens