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JOHNNYCPA
JOHNNYCPA
Level 4
March 30, 2026
Question

state refund taxable on Federal return

  • March 30, 2026
  • 1 reply
  • 4 views

I am doing several Federal and state  tax returns  (2022, 2023, 2024 and 2025 )for the client . The 2023 federal returns shows $500 state refund as taxable since there are itemized deductions.  Since these returns will be submitted soon, do I recognized the $500 in the 2026 return ( cash basis) and remove the $500 taxable refund from the 2023  tax return?

thanks John

1 reply

George4Tacks
George4Tacks
Level 15
March 30, 2026

You report taxable refund in the year it is RECEIVED, so I believe the answer is yes. 

Answers are easy. Questions are hard!
    Skylane
    SkylaneIntuit Community Champion
    Intuit Community Champion
    March 31, 2026

    If there’s a federal refund in 22… best hurry up… you only have 2 weeks to claim it.

    If at first you don’t succeed…..find a workaround
    I
    IntuitAnnetteB6
    Level 2
    March 31, 2026

    Yes, as stated by Champ George4Tacks, you would remove the taxable state refund from the 2023 Federal return since it was not received in 2023.  When the refund is received in 2026, then it will be handled on the 2026 tax return.

     

     

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