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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:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click State Income Tax Refund in the Federal Quick Q&A Topics menu.
  3. Click + Add Form 1099-G State Refund Document to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information.
  5. On the screen titled Enter the state or local income tax refund information, enter or review the information from your prior year federal return to determine the taxable amount of your state income tax refund, select "2019" or older for the Tax year of income tax refund, then click Continue.

Understanding the State Refund Worksheet:

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:

  1. From within your TaxAct Online return, click Print Center in the left to expand, then click Custom Print.
  2. Check Form 1040 State Refund - State Refund Worksheet (the top section contains individual forms or schedules and the bottom section contains documents or worksheets). You may need to scroll down in the section to locate the items.
  3. Click Print, then click the PDF link. Click the printer icon or the save icon (hover your mouse over the PDF form).

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.

  1. Start your TaxAct Desktop program.
  2. Click Forms in the top left corner.
  3. Click to expand the Federal folder, click to expand the Worksheets folder, then click to expand Form 1040 State Refund - State Refund Worksheet.
  4. Double-click Federal Form 1040 State Refund.
  5. Click the pink Printer icon in the toolbar above the form. In the print dialog box that appears, you can send the output to a printer or a PDF document.

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.


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