1099-G Report of State Income Tax Refund

[stanw]

I received a Form 1099-G Report of State Income Tax Refund from the California Franchise Tax Board in the amount of $811 for the 2010 tax year.

1. I do not remember ever receiving this form before. Is there a reason that it was sent to me?

2. I believe somewhere on my return that I am supposed to report this amount? Are they just sending this to me for my convenience?

Thanks.

[jeffreymo]

I know you'll get other responses to confirm this, but I believe that the refund you received for your 2010 state taxes was issued in 2011, and is treated as 2011 income for federal tax purposes.

[Deleted]

Mar 26, 2012 9:28:08 GMT -5 jeffreymo said:

I know you'll get other responses to confirm this, but I believe that the refund you received for your 2010 state taxes was issued in 2011, and is treated as 2011 income for federal tax purposes.

As with almost everything, the answer is.... it depends.


If you itemized your deductions on your 2010 federal tax return, one of the itemized deduction is the amount of state income tax withheld during the year. You would have taken a deduction of the full amount, but you received 811 back in 2011. So on your 2011 federal tax return you will need to include it as income because you took a deduction for it in a previous year.

If you don't itemize your deduction then you don't need to do anything with it since you did not take that amount as a deduction in the previous year.

[mwcpa]

Archie hit the nail on the head... "it depends"

and yes, if you itemized in 2010 any tax refund received, to the benefit derived is taxable in 2011.
if you were in AMT during 2010 more than likely this will not be taxable in 2011 as there would be no benefit derived.
if you did not itemize, took the standard deduction in 2010, then the refund is not taxable in 2011.