Are Tax Refunds Taxable the Following Year?
Also, if you were able to deduct your sales tax and not your state income taxes on last year’s return, then your state refund is not taxable when you file this year.
Is the state of California tax refund taxable?
We are in a high tax state (California) and hit AMT, so the state and local taxes are not deductible. However, it seems that TT still consider the state refund as taxable. Hypothetical numbers, say I got $800 state refund from California for tax year 2016.
