Your tax refund from a state or local government for the prior year may be considered taxable income if you itemized deductions on your prior year federal return.
The opposite is also true: If you claimed the standard deduction instead, your prior year state or local income tax refund is not taxable on this year’s federal return.
Generally, the state or local taxing authority will issue a Form 1099-G Certain Government Payments if you received a tax refund. However, many states are no longer mailing these forms to taxpayers.
To enter Form 1099-G in TaxAct:
The State Refund Worksheet reflects the calculation of the amount (if any) of the state income tax refund received that would be taxable and transferred to Line 1 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income.
To review the calculations and/or print the State Income Tax Refund worksheet:
Note. If you see a message indicating you have not paid your return fees, click the View/Pay your return fees link, which will direct you through the Paper Filing steps. Continue through the screens until you have processed the payment for your product fees and then repeat the steps to print.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.